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Exhibit 2
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ASSET PURCHASE AGREEMENT
AMONG
CHECKFREE CORPORATION
SERVANTIS SYSTEMS HOLDINGS, INC.
SERVANTIS SYSTEMS, INC.
LBSS, INC.
AND
LONDON BRIDGE SOFTWARE HOLDINGS PLC
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Dated as of July 1, 1997
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
SECTION 1.01 Accounts Receivable...........................................1
SECTION 1.02 Asset.........................................................1
SECTION 1.03 Cash Asset ...................................................2
SECTION 1.04 Consent.......................................................2
SECTION 1.05 Contract......................................................2
SECTION 1.06 Contract Right................................................2
SECTION 1.07 Employee Benefit Plan ........................................2
SECTION 1.08 Encumbrance...................................................2
SECTION 1.09 GAAP..........................................................2
SECTION 1.10 Insurance Policy..............................................2
SECTION 1.11 Intangible....................................................3
SECTION 1.12 Judgment......................................................3
SECTION 1.13 Knowledge.....................................................3
SECTION 1.14 Law...........................................................3
SECTION 1.15 Material Adverse Effect.......................................3
SECTION 1.16 Obligation....................................................3
SECTION 1.17 Permit........................................................3
SECTION 1.18 Person........................................................3
SECTION 1.19 Physical Plant Contract.......................................3
SECTION 1.20 Proceeding....................................................4
SECTION 1.21 Real Property.................................................4
SECTION 1.22 Software......................................................4
SECTION 1.23 Tangible Property.............................................4
SECTION 1.24 Tax...........................................................4
ARTICLE II
PURCHASE AND SALE
SECTION 2.01 Sale and Purchase of Specified Asset......................... 4
SECTION 2.02 Seller's Employees........................................... 6
SECTION 2.03 Closing...................................................... 7
SECTION 2.04 Guarantee.................................................... 7
SECTION 2.05 Assignment of Specified Contracts.............................7
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ARTICLE III
PURCHASE PRICE
SECTION 3.01 Purchase Price and Allocation.................................7
SECTION 3.02 Working Capital Adjustment....................................8
SECTION 3.03 Supplemental Payment..........................................9
SECTION 3.04 Currency and Method of Payment...............................10
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Representations and Warranties of Seller.....................10
SECTION 4.02 Representations and Warranties of Servantis..................17
SECTION 4.03 Representations and Warranties of Parent.....................18
SECTION 4.04 Representations and Warranties of LBSH.......................20
SECTION 4.05 Representations and Warranties of Buyer......................23
ARTICLE V
COVENANTS
SECTION 5.01 Conduct of the RMS Division Business.........................24
SECTION 5.02 Issue of LBSH Shares.........................................25
SECTION 5.03 Access to Information........................................26
SECTION 5.04 Further Assurances...........................................28
SECTION 5.05 Acquisition Proposals........................................28
SECTION 5.06 Notification of Certain Matters..............................28
SECTION 5.07 Indemnity....................................................28
SECTION 5.08 Stockholder Agreement........................................29
SECTION 5.09 Best Efforts.................................................29
SECTION 5.10 Comfort Letter...............................................29
ARTICLE VI
CONDITIONS TO THE ACQUISITION
SECTION 6.01 Conditions to Each Party's Obligation to
Effect the Acquisition.......................................29
SECTION 6.02 Conditions to the Obligation of LBSH and Buyer to Effect the
Acquisition..................................................30
SECTION 6.03 Conditions to the Obligation of the Selling Companies
to Effect the Acquisition....................................32
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ARTICLE VII
TERMINATION AND ABANDONMENT
SECTION 7.01 Termination and Abandonment..................................33
SECTION 7.02 Effect of Termination........................................34
SECTION 7.03 Termination Fee to Parent....................................35
SECTION 7.04 Termination Fee to Buyer.....................................35
ARTICLE VIII
INDEMNIFICATION
SECTION 8.01 Indemnification by Buyer and LBSH............................36
SECTION 8.02 Indemnification by the Selling Companies.....................36
SECTION 8.03 Claims.......................................................36
SECTION 8.04 Notice and Defense of Third-Party Claims.....................37
SECTION 8.05 Settlement or Compromise.....................................37
SECTION 8.06 Limitations on Indemnification...............................38
ARTICLE IX
NONCOMPETITION AGREEMENT; NONSOLICITATION AGREEMENT
SECTION 9.01 Noncompetition Agreement.....................................38
SECTION 9.02 Exception....................................................38
SECTION 9.03 No Objection or Defense......................................39
SECTION 9.04 Enforcement of Noncompetition Agreement......................39
SECTION 9.05 Early Termination of Noncompetition Agreement................39
SECTION 9.06 Effect on Acquiror...........................................39
SECTION 9.07 Nonsolicitation Agreement....................................39
ARTICLE X
MISCELLANEOUS
SECTION 10.01 No Survival of Representations and Warranties................40
SECTION 10.02 Interpretation of Representations and Warranties.............40
SECTION 10.03 Expenses, Etc................................................40
SECTION 10.04 Publicity; Confidentiality...................................40
SECTION 10.05 Execution in Counterparts....................................40
SECTION 10.06 Notices......................................................41
SECTION 10.07 Waivers......................................................42
SECTION 10.08 Amendments, Supplements, Etc.................................42
SECTION 10.09 Entire Agreement.............................................42
SECTION 10.10 Applicable Law...............................................53
SECTION 10.11 Jurisdiction.................................................43
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SECTION 10.12 Binding Effect; Benefits.....................................43
SECTION 10.13 Assignability................................................43
SECTION 10.14 Severability.................................................43
SECTION 10.15 Variation and Amendment......................................43
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INDEX TO SCHEDULES AND EXHIBITS
Schedule Description
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1.13 Responsible Managers of the RMS Division Business
2.01(b) Specified Liabilities
2.02 Employees of the RMS Division Business
3.01 Allocation of Purchase Price
3.02 Working Capital Adjustment Guidelines
4.01(c) Certain Conflicts
4.01(d) Consents
4.01(f) Unaudited Financial Statements
4.01(g) Certain Changes or Events
4.01(h) Litigation
4.01(j) Obligations
4.01(i) Specified Assets
4.01(i)(1) Accounts Receivable
4.01(l) Tangible Property
4.01(m) Real Property
4.01(n) Software and Intangibles
4.01(o) Specified Contracts
4.01(q) Taxes
4.01(r) Permits
4.01(s) Employee Benefit Plans
4.01(t) Insurance
4.01(u) Brokers
4.02(c) Brokers
4.02(d) Certain Conflicts
4.02(e) Consents
4.03(c) Brokers
4.03(d) Certain Conflicts
4.03(e) Consents
4.04(b) Authority
4.04(c) Certain Conflicts
4.04(d) Consents
4.04(e) Brokers
4.04(f) Subsidiaries
4.04(g) Capitalization
4.04(k) Pending Transactions
4.04(l) Audited Financial Statements
4.04(n) Litigation
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Exhibits Description
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Exhibit A Shareholder Agreement
Exhibit B Comfort Letter of Xxxxxxxxx Xxxxxxxxxxx
Exhibit C Opinion of Porter, Wright, Xxxxxx & Xxxxxx
Exhibit D Opinion of Parker, Poe, Xxxxx & Xxxxxxxxx
Exhibit E Opinion of Xxxxxxx Xxxxx Xxxxxxxxxxx
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") is dated as of July 1,
1997 (the "Effective Date"), among CheckFree Corporation, a Delaware
corporation ("Parent"), Servantis Systems Holdings, Inc., a Delaware
corporation and a wholly owned subsidiary of Parent ("Servantis"), Servantis
Systems, Inc., a Georgia corporation and a wholly owned subsidiary of Servantis
("Seller"), (Parent, Servantis, and Seller shall sometimes be collectively
referred to as the "Selling Companies"), London Bridge Software Holdings plc,
an English corporation ("LBSH"), and LBSS, Inc., a Delaware corporation and a
wholly owned subsidiary of LBSH ("Buyer").
RECITALS
A. Seller is in the business of developing and marketing a Recovery
Management System which automates the processes required to legally recover
debts (the "RMS Division Business").
B. The respective Boards of Directors of Parent, Servantis, Seller,
LBSH, and Buyer, have approved the sale and acquisition of the RMS Division
Business.
C. The parties desire that Seller sell and Buyer buy all of the
business and assets of the RMS Division Business on the terms and conditions
set forth in this Agreement (the "Acquisition").
AGREEMENT
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants, agreements and conditions contained herein, and in order
to set forth the terms and conditions of the Acquisition and the mode of
carrying the same into effect, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Certain defined terms used in this Agreement in connection exclusively
with the RMS Division Business and not specifically defined in context are
defined in this Article I, as follows:
SECTION 1.01. "Accounts Receivable" means (a) any right to payment for
goods sold, leased or licensed or for services rendered, whether or not it has
been earned by performance, whether billed or unbilled, and whether or not it
is evidenced by any Contract; (b) any note receivable; or (c) any other
receivable or right to payment of any nature.
SECTION 1.02. "Asset" means any real, personal, mixed, tangible or
intangible property of any nature, including, but not limited to, Cash Assets,
prepayments, deposits, escrows, Accounts
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Receivable, Tangible Property, Real Property, Software, Contract Rights,
Intangibles, and goodwill, and claims, causes of action and other legal rights
and remedies.
SECTION 1.03. "Cash Asset" means any cash on hand, cash in bank or
other accounts, marketable securities, and other cash-equivalent liquid assets
of any nature.
SECTION 1.04. "Consent" means any consent, approval, order or
authorization of, or any declaration, filing or registration with, or any
application or report to, or any waiver by, or any other action (whether
similar or dissimilar to any of the foregoing) of, by or with, any Person,
which is necessary in order to take a specified action or actions in a
specified manner and/or to achieve a specified result.
SECTION 1.05. "Contract" means any written or oral contract,
agreement, instrument, order, arrangement, commitment or understanding of any
nature, including, but not limited to, sales orders, purchase orders, leases,
subleases, data processing agreements, maintenance agreements, license
agreements, sublicense agreements, loan agreements, promissory notes, security
agreements, pledge agreements, deeds, mortgages, guaranties, indemnities,
warranties, employment agreements, consulting agreements, sales representative
agreements, joint venture agreements, buy-sell agreements, options or warrants.
SECTION 1.06. "Contract Right" means any right, power or remedy of any
nature under any Contract including, but not limited to, rights to receive
property (including Cash Assets) or services or otherwise derive benefits from
the payment, satisfaction or performance of another party's Obligations, rights
to demand that another party accept property or services or take any other
actions, and rights to pursue or exercise remedies or options.
SECTION 1.07. "Employee Benefit Plan" means any employee benefit plan
as defined in Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or any other plan, program, policy or arrangement
for or regarding bonuses, commissions, incentive compensation, severance,
vacation, deferred compensation, pensions, profit sharing, retirement, payroll
savings, stock options, stock purchases, stock awards, stock ownership, phantom
stock, stock appreciation rights, medical/dental expense payment or
reimbursement, disability income or protection, sick pay, group insurance, self
insurance, death benefits, employee welfare or fringe benefits of any nature;
but not including employment Contracts with individual employees.
SECTION 1.08. "Encumbrance" means any lien, security interest, pledge,
mortgage, charge, restriction, prior assignment, or other encumbrance, claim,
burden or charge of any nature.
SECTION 1.09. "GAAP" means generally accepted accounting principles
under United States accounting rules and regulations, consistently applied.
SECTION 1.10. "Insurance Policy" means any public liability, product
liability, general liability, comprehensive, property damage, vehicle, life,
hospital, medical, dental, disability, worker's compensation, key man, fidelity
bond, theft, forgery, errors and omissions, directors' and officers' liability,
or other insurance policy of any nature.
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SECTION 1.11. "Intangible" means any name, corporate name, fictitious
name, trademark, trademark application, service xxxx, service xxxx application,
trade name, brand name, product name, slogan, trade secret, know-how, patent,
patent application, copyright, copyright application, design, logo, formula,
invention, product right or other intangible asset of any nature, whether in
use, under development or design, or inactive.
SECTION 1.12. "Judgment" means any order, writ, injunction, citation,
award, decree or other judgment of any nature of any foreign, federal, state or
local court, governmental body, administrative agency, regulatory authority or
arbitration tribunal.
SECTION 1.13. "Knowledge" with reference to the phrases "to Seller's
Knowledge" or "to the best of Seller's Knowledge" or similar phrases means that
none of the executive officers or directors of the Selling Companies or the
responsible managers of the RMS Division Business as listed on Schedule 1.13
have any actual knowledge, after reasonable due inquiry, that the statement
made is incorrect or misleading. For this purpose, "actual knowledge after
reasonable due inquiry" means all information that any of the executive
officers or directors of the Selling Companies or responsible managers of the
RMS Division Business reasonably should have known in the course of operating
and managing the business and affairs of the RMS Division Business.
SECTION 1.14. "Law" means any provision of any foreign, federal, state
or local law, statute, ordinance, charter, constitution, treaty, rule or
regulation.
SECTION 1.15. "Material Adverse Effect" means any adverse effect on
(a) the financial condition, financial performance or business prospects of the
RMS Division Business, or (b) any of the Specified Assets (as defined in
Section 2.01(a) below) or Specified Liabilities (as defined in Section 2.01(b)
below) of the RMS Division Business, or (c) any of the Assets of third parties
which are used in the RMS Division Business and are not readily replaceable;
which adverse effect is or will be material, under either GAAP or applicable
legal principles, to the RMS Division Business or the Specified Assets.
SECTION 1.16. "Obligation" means any debt, liability or obligation of
any nature, whether secured, unsecured, recourse, nonrecourse, liquidated,
unliquidated, accrued, absolute, fixed, contingent, ascertained, unascertained,
known, unknown or otherwise.
SECTION 1.17. "Permit" means any license, permit, approval, waiver,
order, authorization, right or privilege of any nature, granted, issued,
approved or allowed by any foreign, federal, state or local governmental body,
administrative agency or regulatory authority.
SECTION 1.18. "Person" means any individual, sole proprietorship,
joint venture, partnership, corporation, association, cooperative, trust,
estate, governmental body, administrative agency, regulatory authority or other
entity of any nature.
SECTION 1.19. "Physical Plant Contract" means any Contract related to
or associated with the operation and/or maintenance of the physical facilities
and equipment used in the RMS Division Business and services provided thereto
including, but not limited to, real property and equipment
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leases, sanitation services, alarm and security services, housekeeping and
maintenance services, copier and fax machine maintenance and services, and
telephone, electric, natural gas, water, sewage, and other utility services;
provided, however, that such Contract is not otherwise assigned to Buyer
pursuant to Section 2.01(a) below.
SECTION 1.20. "Proceeding" means any dispute, demand, claim, suit,
action, litigation, investigation, arbitration, administrative hearing or other
proceeding of any nature.
SECTION 1.21. "Real Property" means any real estate, land, building,
structure or other real property of any nature, all shares of stock or other
ownership interests in cooperative or condominium associations or other forms
of ownership interest through which interests in real estate may be held, and
all appurtenant and ancillary rights thereto, including, but not limited to,
easements, covenants, water rights, sewer rights, and utility rights.
SECTION 1.22. "Software" means any computer program, operating system,
applications system, firmware or software of any nature, whether operational,
under development or inactive, including all object code, source code,
technical manuals, user manuals and other documentation therefor, whether in
machine-readable form, programming language or any other language or symbols,
and whether stored, encoded, recorded or written on disk, tape, film, memory
device, paper or other media of any nature.
SECTION 1.23. "Tangible Property" means any furniture, fixtures,
leasehold improvements, vehicles, office equipment, computer equipment, other
equipment, machinery, tools, forms, supplies or other tangible personal
property of any nature.
SECTION 1.24. "Tax" means (a) any foreign, federal, state or local
income, earnings, profits, gross receipts, franchise, capital stock, net worth,
sales, use, occupancy, general property, real property, personal property,
intangible property, transfer, fuel, excise, payroll, withholding, unemployment
compensation, social security or other tax of any nature; (b) any foreign,
federal, state or local organization fee, qualification fee, annual report fee,
filing fee, occupation fee, assessment, sewer rent or other fee or charge of
any nature; or (c) any deficiency, interest or penalty imposed with respect to
any of the foregoing.
ARTICLE II
PURCHASE AND SALE
SECTION 2.01 Sale and Purchase of Specified Assets. On the Closing
Date, and subject to the other terms and conditions of this Agreement, the
Selling Companies shall sell, transfer, assign and convey to Buyer, and Buyer
shall purchase, all right, title, and interest in and to all of the Specified
Assets, and the Selling Companies shall assign to Buyer, and Buyer shall
assume, the Specified Liabilities.
(a) Specified Assets of the Selling Companies. The "Specified
Assets" means all Assets used in or for the RMS Division Business as of the
Closing Date, wherever located and
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whether or not reflected on the Selling Companies' books and records,
including, but not limited to, the following Assets, and excluding the Assets
specifically excepted below:
(1) All of the Selling Companies' Accounts Receivable and
other current assets arising in connection with or relating to the RMS Division
Business and listed on Schedule 4.01(i), excluding Cash Assets.
(2) All of the Selling Companies' Tangible Property,
Software, and Intangibles used in or for the RMS Division Business and listed
on Schedule 4.01(i), but excluding the mainframe data processing equipment,
non-product applications software licensed to the Selling Companies as more
fully described on Schedule 4.01(i), the related operating systems software
used to supply data processing services to the Selling Companies' businesses in
addition to the RMS Division Business, the CheckFree or Servantis names or
marks, and any Assets not used exclusively in the RMS Division Business as more
fully described on Schedule 4.01(l).
(3) All of the Selling Companies' Contract Rights under the
Specified Contracts, but excluding Contract Rights under (i) this Agreement and
any other Contracts entered into by the Selling Companies with LBSH or Buyer in
connection with the transactions contemplated by this Agreement; (ii) Contracts
that constitute or evidence Employee Benefit Plans of Seller; and (iii) all
Contract Rights under any Specified Contracts requiring a material Consent that
is not obtained on or before the Closing Date ("Non-Assigned Contracts"),
provided that the Specified Assets shall include the rights of the Selling
Companies with respect to all noncompetition, nondisclosure, and other
restrictive covenants made for the benefit of the Selling Companies or their
affiliates (or any of their respective predecessors) in any such Contract; and
subject always to Section 2.05 below and provided that, once such material
Consent is obtained, the Contract Rights under such Specified Contract shall be
deemed, automatically and without further action by the parties, to be included
in the Specified Assets as of the date such material Consent is delivered to
Buyer.
(4) All of the Selling Companies' Contract Rights under any
noncompetition, nondisclosure or other restrictive covenant made for the
benefit of the Selling Companies or their affiliates (or any of their
respective predecessors) in any Contract with current or former employees of
the RMS Division Business, regardless of whether any such current employee
accepts Buyer's offer pursuant to Section 2.02 below.
(5) All transferable rights under all Permits granted or
issued to the Selling Companies or otherwise held by the Selling Companies
relating to or for the benefit of the RMS Division Business.
(6) All of the Selling Companies' rights with respect to
advertisements used specifically in the RMS Division Business, and all of the
Selling Companies' goodwill relating to or arising in connection with the RMS
Division Business.
(7) All of the Selling Companies' customer lists, supplier
lists, data bases, computer media, sales and marketing materials, invoices,
correspondence, files, books and records
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relating to or arising in connection with the RMS Division Business, but
excluding (i) the Selling Companies' corporate minute books and stock books;
and (ii) the Selling Companies' files, books and records relating exclusively
to the Selling Companies' Assets not included in the Specified Assets or to the
Selling Companies' liabilities not included in the Specified Liabilities.
(8) All of Seller's rights to insurance proceeds (and those
proceeds actually received), if any, in connection with (a) any casualty to the
Specified Assets occurring between the Effective Date of the Agreement and the
Closing Date, (b) any business interruption of the RMS Division Business after
the Closing Date, and (c) any insurance claim in respect of liabilities or
obligations of the RMS Division Business which claim arises after the Closing
Date but relates to a prior period.
(9) All of the Selling Companies' claims, causes of action
and other legal rights and remedies, whether or not known as of the Closing
Date, relating to such the Selling Companies' ownership of the Specified Assets
and/or the operation of the RMS Division Business, but excluding causes of
action and other legal rights and remedies of the Selling Companies (i) against
LBSH or Buyer with respect to the transactions contemplated by this Agreement;
or (ii) relating exclusively to the Selling Companies' Assets not included in
the Specified Assets or to the Selling Companies' liabilities not included in
the Specified Liabilities.
(b) Specified Liabilities of the Selling Companies. The
"Specified Liabilities" means the following specifically described liabilities
of the Selling Companies as of the Closing Date incurred or arising in
connection with the RMS Division Business:
(1) All liabilities of the Selling Companies incurred or
arising in connection with the RMS Division Business and listed on Schedule
2.01(b), including, but not limited to, prepaid maintenance obligations.
(2) All liabilities of the Selling Companies under those
Specified Contracts to which Seller is a party.
(3) All liabilities of the Selling Companies under
Contracts relating to the RMS Division Business entered into between the date
of this Agreement and the Closing Date pursuant to Section 5.01 below.
SECTION 2.02 Seller's Employees.
(a) Subject to the condition that the Closing hereunder occurs,
Buyer shall offer to employ, as of the Closing Date, the employees of Seller
engaged in the RMS Division Business listed on Schedule 2.02. Such employment
will be on an "at will" basis for cash compensation and employee benefits
comparable to those benefits (including, but not limited to, participation and
vesting in Buyer's 401(k) Plan and eligibility for vacation under Buyer's
vacation plan) enjoyed by Buyer's existing employees of equivalent status,
based on the date each such employee, respectively, was first employed by the
RMS Division Business or its predecessors. Seller shall cooperate with Buyer's
efforts to employ and retain any such employees. At Closing, Seller shall
provide to Buyer
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copies of the personnel records of Seller's employees engaged in the RMS
Division Business. For a period of one (1) year after the Closing Date, Buyer
agrees to abide by the Selling Companies' severance policy for any employees of
the RMS Division Business who are terminated during such one-year period. No
third party is intended to, nor shall, acquire or enjoy any rights against
Buyer by reason of this Section 2.02
(b) At Closing, Buyer agrees to reimburse Seller for the loans to
employees listed on Schedule 2.02 and to assume such employee loans.
SECTION 2.03 Closing. The closing (the "Closing") shall be scheduled
to occur at the executive offices of CheckFree Corporation, Atlanta, Georgia at
10:00 a.m. local time, on a date as soon as practicable (but in any event not
later than August 30, 1997, unless otherwise agreed) after the satisfaction or
waiver of the conditions to the obligations of the parties to effect the
Acquisition set forth herein. The Closing, and all transactions to occur at the
Closing, shall be deemed to have taken place at, and shall be effective as of,
the close of business on the date of closing (the "Closing Date").
SECTION 2.04 Guarantee. Simultaneously with the execution of this
Agreement, Buyer has delivered to the Selling Companies the guarantee of LBSH
in a form acceptable to the Selling Companies (the "Guarantee").
SECTION 2.05 Assignment of Specified Contracts. Following the
execution of this Agreement, the parties hereto shall use their best efforts to
obtain any material Consent required with respect any of the Specified
Contracts. With respect to those Specified Contracts where material Consent is
required and where such Consent is not obtained on or before the Closing Date,
the parties hereto will continue to use their best efforts to obtain such
Consent following the Closing Date and, until such Consent is obtained, the
Selling Companies shall hold the benefit of such Specified Contract in trust
for Buyer and will undertake all reasonable requests and instructions of Buyer
with respect to such Specified Contract, while Buyer shall perform all relevant
provisions of the Specified Contract remaining to be performed as of the
Closing Date as agent for the Selling Companies.
ARTICLE III
PURCHASE PRICE
SECTION 3.01 Purchase Price and Allocation. The total purchase price
for the Specified Assets ("Purchase Price") shall consist of: (a) a cash
payment (the "Closing Payment") in the amount of Thirty-Three Million Four
Hundred Fifty Thousand Dollars ($33,450,000) payable at Closing by LBSH to
Seller; (b) a payment (the "Supplemental Payment") in the amount of up to One
Million Five Hundred Thousand Dollars ($1,500,000) payable in accordance with
Section 3.03 below; and (c) the assumption of the Specified Liabilities by
Buyer in accordance with Section 2.01(b) above. The Purchase Price shall be
paid to Seller, and allocated among the Specified Assets, the Specified
Liabilities, and the noncompetition covenants set forth in Article IX, in the
amounts set forth on Schedule 3.01.
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SECTION 3.02 Working Capital Adjustment. The parties agree to the
following working capital adjustment (the "Working Capital Adjustment"):
(a) If the amount of the Minimum Working Capital (as that term is
defined below) is greater than the amount of the Actual Working Capital (as
that term is defined below), then Seller shall pay to Buyer in cash the
difference between the Minimum Working Capital and Actual Working Capital. If,
however, the amount of the Actual Working Capital is greater than the amount of
the Minimum Working Capital, the Buyer shall pay to Seller in cash the
difference between the Actual Working Capital and the Minimum Working Capital.
(b) The "Actual Working Capital" shall equal the difference
between the RMS Current Assets (as that term is defined below) and the RMS
Current Liabilities (as that term is defined below). The "Minimum Working
Capital" shall equal $894,782.
(c) The "RMS Current Assets" shall mean all the Assets on the
Closing Date of RMS Division Business that are realizable in less than one (1)
year, excluding Cash Assets. The RMS Current Assets will be determined in
accordance with Schedule 3.02 and with Parent's historical accounting
practices, which comply with GAAP. The RMS Current Assets include the trade and
unbilled accounts receivable (less allowance for doubtful accounts) and the
employee receivables of the RMS Division Business less Cash Assets. The "RMS
Current Liabilities" shall mean all the liabilities on the Closing Date of RMS
Division Business that are due in less than one (1) year. The RMS Current
Liabilities will be determined in accordance with Schedule 3.02 and with
Parent's historical accounting practices, which comply with GAAP. The RMS
Current Liabilities include deferred revenue (which shall include prepaid
maintenance even if scheduled to be performed more than one year in the
future), trade accounts payable, accrued commissions and bonuses, accrued
royalties, and other accrued liabilities required in the operation of the RMS
Division Business. Whether or not consistent with the foregoing, the amount of
accounts receivable attributable to the sale of the software license to Ford
Motor Company, not to exceed $677,709, shall be deemed to be part of the RMS
Current Assets and Parent guarantees the payment of such accounts receivable on
the due date therefor.
(d) Payment on the Working Capital Adjustment shall be made on
three (3) business days after delivery of the final Statement of Adjustments by
the Arbiter to Buyer and Seller or its deemed acceptance under Section 3.02(c)
below.
(e) Buyer shall (a) prepare a statement ("Statement of
Adjustments") showing a clear and detailed calculation of the RMS Current
Assets and the RMS Current Liabilities described in this Section 3.02; and (b)
deliver the Statement of Adjustments to Seller within thirty (30) days after
the Closing Date. Seller shall notify Buyer, in reasonable detail, of any
objections to the Statement of Adjustments within thirty (30) days after Seller
receives the Statement of Adjustments. If Seller does not notify Buyer of any
such objections by the end of that thirty-day period, then the Statement of
Adjustments, as prepared by Buyer, shall be considered final on the last day of
that thirty-day period. If Seller does notify Buyer of any such objections by
the end of that thirty-day period, and Buyer and Seller are unable to resolve
their differences within seven (7) days thereafter, then the disputed items on
the Statement of Adjustments shall be submitted to Coopers & Xxxxxxx
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LLP, Atlanta, Georgia (the "Arbiter"), for resolution, with the costs thereof
paid fifty percent (50%) by Seller and fifty percent (50%) by Buyer, and the
arbiter shall be instructed to deliver a final Statement of Adjustments to
Seller and Buyer as soon as possible.
SECTION 3.03 Supplemental Payment.
(a) The parties expressly acknowledge that the Supplemental
Payment will be based on the worldwide license sales generated by LBSH and
Buyer with the RMS Division Business products (the "New Entity") excluding
income arising from development work, installation, consulting, training,
maintenance or support, and net of applicable discounts, rebates, returns, and
bad debts. Buyer shall use its reasonable best efforts to recognize license
sales for the New Entity during the Supplemental Payment Period (the period
from the Closing Date to the first anniversary of the Closing Date being the
"Supplemental Payment Period").
(b) The Supplemental Payment shall be paid in cash or in ordinary
shares in the capital of LBSH (the "LBSH Shares") by Buyer, in its sole
discretion, to Seller as follows:
(1) Seller shall be entitled to such percentage of the
Supplemental Payment equal to the amount of the New Entity's license sales
during the Supplemental Payment Period in excess of $3,500,000 divided by
$546,000;
(2) Notwithstanding the foregoing, Seller shall not be
entitled to more than 100% of the Supplemental Payment upon the New Entity
achieving license sales equal to or greater than $4,046,000.
(c) If Buyer elects to pay the Supplemental Payment in LBSH
Shares, the number of LBSH Shares to be issued to Seller shall be determined by
dividing the amount due on June 30, 1998 (the "Supplemental Payment Date") by
the lower of (i) the closing middle market price per share of the LBSH Shares
on the London Stock Exchange on the last trading day before the Supplement
Payment Date, and (ii) the average per share closing middle market price per
share of the LBSH Shares on the London Stock Exchange for the ten consecutive
trading days ending on the last trading day before the Supplemental Payment
Date.
(d) If Buyer elects to pay the Supplemental Payment in LBSH
Shares, Seller shall, at Buyer's written request, assign to LBSH Buyer's
obligation to pay the Supplemental Payment, in consideration for the issue to
Seller of the LBSH Shares referred to in Section 3.03(c) above.
(e) Buyer shall (a) prepare a statement ("Statement of
Supplemental Payment") showing a clear and detailed calculation of the license
sales recognized during the Supplemental Payment Period; and (b) deliver the
Statement of Supplemental Payment as soon as practicable after the Supplemental
Payment Date but in any event within thirty (30) days thereafter. Seller shall
notify Buyer, in reasonable detail, of any objections to the Statement of
Supplemental Payment within thirty (30) days after Seller receives the
Statement of Supplemental Payment. If Seller does not notify Buyer of any such
objections by the end of that thirty-day period, then the Statement of
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Supplemental Payment, as prepared by Buyer, shall be considered final on the
last day of that thirty-day period. If Seller does notify Buyer of any such
objections by the end of that thirty-day period, and Seller and Buyer are
unable to resolve their differences within seven (7) days thereafter, then the
disputed items on the Statement of Supplemental Payment shall be submitted to
the Arbiter for resolution, with the costs thereof paid fifty percent (50%) by
Seller and fifty percent (50%) by Buyer, and the Arbiter shall be instructed to
deliver a final Statement of Supplemental Payment to Seller and Buyer as soon
as possible.
(f) In the event of dispute pursuant to Section 3.03(e) above,
Buyer shall pay to Seller the Supplemental Payment within three (3) business
days after the delivery of the final Statement of Supplemental Payment by the
Arbiter to Buyer and Seller or its deemed acceptance under Section 3.03(e)
above.
SECTION 3.04 Currency and Method of Payment. All dollar amounts stated
in this Agreement are stated in United States currency, and all cash payments
required under this Agreement shall be paid in United States currency. All cash
payments required under this Agreement shall be made by wire transfer of
immediately available United States federal funds.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Representations and Warranties of Seller. Seller
represents and warrants to LBSH and Buyer as follows:
(a) Organization and Qualification. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Georgia and has all requisite corporate power and authority to own or lease and
operate its properties and assets and to carry on its business as it is now
being conducted. Seller is qualified as a foreign corporation to do business,
and is in good standing, in each jurisdiction in which the character of its
properties owned or leased or the nature of its activities makes such
qualification necessary.
(b) Authority Relative to Agreement. Seller has all requisite
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. The execution, delivery, and performance of
this Agreement by Seller and the consummation by it of the transactions
contemplated hereby have been duly authorized by Seller's Board of Directors
and no other corporate approvals or proceedings on the part of Seller are
necessary to authorize this Agreement and the transactions contemplated hereby.
This Agreement has been duly executed and delivered by Seller and constitutes
the legal, valid, and binding obligation of Seller, enforceable against Seller
in accordance with its terms, subject to the effect, if any, of (1) applicable
bankruptcy and other similar laws affecting the rights of creditors generally,
(2) rules of law governing specific performance, injunctive relief, and other
equitable remedies, and (3) the limitations imposed by public policy on the
enforceability of provisions requiring indemnification in connection with the
offering, issuance, or sale of securities.
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(c) Non-Contravention. The execution and delivery of this
Agreement by Seller and the consummation by Seller of the transactions
contemplated hereby will not (1) violate or conflict with any provision of the
Certificate of Incorporation or By-Laws of Seller or (2) except as set forth on
Schedule 4.01(c) hereof, result in any violation of, conflict with, or default
(or an event which with notice or lapse of time or both would constitute a
default) or loss of a benefit under, or permit the termination of or the
acceleration of any obligation under, any material mortgage, indenture, lease,
agreement or other instrument applicable to the RMS Division Business, or (3)
result in the creation or imposition of any Encumbrances in favor of any third
person or entity upon any of the Specified Assets of the RMS Division Business,
other than any such violation, conflict, default, loss, termination or
acceleration that would not have a Material Adverse Effect.
(d) Consents. Except as set forth on Schedule 4.01(d), no
consent, approval, order or authorization of, or registration, declaration or
filing with, any Federal, state, local or foreign governmental or regulatory
authority is required to be made or obtained by Seller in connection with the
execution and delivery of this Agreement by Seller or the consummation by
Seller of the transactions contemplated hereby, except for (1) compliance by
Seller with the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), and (2) such consents, approvals, orders or
authorizations which if not obtained, or registrations, declarations or filings
which if not made, would not have a Material Adverse Effect or materially
adversely affect the ability of Seller to consummate the transactions
contemplated hereby.
(e) Financial and Corporate Records. With respect to the RMS
Division Business, Parent's books and records are and have been properly
prepared and maintained in form and substance adequate for preparing pro forma
financial statements, and fairly and accurately reflect all Specified Assets
and Obligations and all Contracts and transactions to which any of Selling
Companies is or was a party or by which any of Selling Companies or any of
their business or Specified Assets is or were affected. The copies of Seller's
corporate minute books that have been made available to Buyer contain accurate
minutes of all meetings of Seller's directors and stockholders, and accurate
written statements of all actions taken by Seller's directors or stockholders
without a meeting.
(f) Financial Statements. Seller's fiscal year ends on June 30.
Schedule 4.01(f) includes copies of the following unaudited financial
statements (the "Unaudited Financial Statements") prepared by the management of
Seller: (i) a balance sheet of the RMS Division Business as of April 30, 1997
and as of June 30, 1996 and 1995; and (ii) statements of operations of the RMS
Division Business for the ten months ended April 30, 1997 and the fiscal years
ended June 30, 1996 and 1995. Except as set forth on Schedule 4.01(f), all of
the Unaudited Financial Statements were (a) prepared in a manner consistent
with the manner with which Parent has prepared financial statements for Seller
and Parent's other subsidiaries under accounting principles consistently
applied and consistent with prior periods, except that such statements are
subject to year end adjustments (which consist of normal recurring accruals
consistent with past practice) and do not contain footnote disclosures; and (b)
all adjustments that are necessary for a fair presentation thereof (consisting
only of normal recurring adjustments consistent with past practice) have been
made.
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Subject to the foregoing, such balance sheets fairly present in
all material respects the financial position of the RMS Division Business as of
their respective dates, and such statements of operations present in all
material respects the results of operations of the RMS Division Business for
the respective periods then ended.
(g) Absence of Certain Changes or Events. Except as set forth on
Schedule 4.01(g), from April 30, 1997 to the Effective Date of this Agreement:
(1) Except in the ordinary course of its business consistent
with its past practices, no Selling Company has (i) created or assumed any
Encumbrance upon any of the RMS Division Business, (ii) incurred any Obligation
on behalf of or relating to the RMS Division Business, (iii) made any loan or
advance to any Person on behalf of or relating to the RMS Division Business;
(iv) assumed, guaranteed or otherwise become liable for any Obligation of any
Person on behalf of or relating to the RMS Division Business; (v) committed for
any capital expenditure on behalf of or relating to the RMS Division Business;
(vi) purchased, leased, sold, abandoned or otherwise acquired or disposed of
any part of the RMS Division Business; (vii) waived any right or canceled any
debt or claim on behalf of or relating to the RMS Division Business; (viii)
assumed or entered into any Contract on behalf of or relating to the RMS
Division Business other than this Agreement; (ix) increased, or authorized an
increase in, the compensation or benefits paid or provided to any of its
directors, officers, employees, salesmen, agents or representatives engaged in
the RMS Division Business; or (x) done anything else outside the ordinary
course of business on behalf of or relating to the RMS Division Business,
whether or not specifically described in any of the foregoing clauses.
(2) Even in the ordinary course of its business consistent
with its past practices, no Selling Company has incurred any Obligation on
behalf of or relating to the RMS Division Business, made any loan to any Person
on behalf of or relating to the RMS Division Business, acquired or disposed of
any part of the RMS Division Business, entered into any Contract (other than
customer Contracts) or other transaction on behalf of or relating to the RMS
Division Business, or done any of the other things described in this Section
4.01(g)(2), involving an amount exceeding $100,000 in any single case or
$500,000 in the aggregate. Schedule 4.01(g) sets forth certain transactions
entered into in the ordinary course of Seller's business.
(3) There has been no material adverse change or material
casualty loss affecting the RMS Division Business, the financial condition of
the RMS Division Business, and there has been no material adverse change in the
financial performance of the RMS Division Business.
(h) Actions Pending. Except as described on Schedule 4.01(h), (1)
no Proceeding involving or related to the RMS Division Business or any
Specified Asset or Specified Liability is currently pending or, to Seller's
Knowledge, threatened in writing, nor has any Proceeding occurred at any time
since January 1, 1996, to which any Selling Company is or was a party, or by
which the RMS Division Business or any Specified Asset or Specified Liability
is or was affected; (2) no Judgment involving or related to the RMS Division
Business or any Specified Asset or Specified Liability is currently
outstanding, nor has any Judgment been outstanding at any time since January
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1, 1996, by which the RMS Division Business or any Specified Asset or Specified
Liability is or was affected; and (3) no breach of contract, breach of
warranty, tort, negligence, infringement, product liability, discrimination,
wrongful discharge or other claim of any nature involving or related to the RMS
Division Business has been asserted or, to Seller's Knowledge, threatened in
writing by or against any Selling Company at any time since January 1, 1996,
and, to Seller's Knowledge, there is no basis for any such claim. As to each
matter described on Schedule 4.01(h), copies of all pertinent claims,
pleadings, judgments, orders, correspondence and other legal documents have
been delivered to Buyer.
(i) Specified Assets. Schedule 4.01(i) includes detailed lists,
as of April 30, 1997, of all Specified Assets used in or for the RMS Division
Business (which Seller warrants are all the Assets used in the RMS Division
Business except as otherwise excluded in this Agreement) itemized by balance
sheet account, including (1) Accounts Receivable, showing customer names,
individual invoice dates, individual invoice amounts and allowances for
doubtful accounts, or, in the case of earned but not billed receivables,
customer names and individual dates on which the receivables (other than
receivables based on consulting services) are billable; (2) other current
Assets, itemized by category and with appropriate explanation; (3) Tangible
Property, grouped as to type, showing cost, accumulated depreciation and net
book value; and (4) Software and Intangibles, showing cost or amount
capitalized, accumulated amortization and net book value. Seller has good title
to all of the Specified Assets used in the RMS Division Business and has the
right to transfer all right, title and interest in such Specified Assets to
Buyer, free and clear of any Encumbrance. Since June 30, 1994, the RMS Division
Business has been conducted by Seller. To Seller's knowledge, the Specified
Assets are all the assets required to be used in and for the RMS Division
Business in order to carry on that business in the ordinary course consistent
with past practices, other than those assets listed on Schedule 4.01(l).
(j) Seller's Obligations. Schedule 4.01(j) is a detailed list, as
of April 30, 1997, of all of the accounts payable, accrued expenses, deferred
income, and other current and long-term liabilities incurred or arising in the
RMS Division Business, grouped by balance sheet account, excluding liabilities
for Taxes, intercompany liabilities and notes payable, other than as set forth
on Schedule 4.01(j). No Selling Company has any Obligations with respect to the
RMS Division Business other than (1) the Obligations listed on Schedule
4.01(j); (2) Obligations under the Specified Contracts, any Contracts not
required to be listed on Schedule 4.01(o), Employee Benefit Plans listed on
Schedule 4.01(s), and Insurance Policies listed on Schedule 4.01(t); and (3)
Obligations incurred since April 30, 1997. Except as set forth on Schedule
4.01(j), none of Selling Companies' Obligations incurred or arising in the RMS
Division Business is guaranteed by any Person.
(k) Accounts Receivable. All Accounts Receivable of the RMS
Division Business listed in Schedule 4.01(i)(1) arose in the ordinary course of
business and are proper and valid accounts receivable except for the allowance
for doubtful accounts shown on Schedule 4.01(i)(1). Proper amounts of deferred
revenues appear on the books and records of the Selling Companies with respect
to all of the (1) billed but unearned Accounts Receivable of the RMS Division
Business; (2) previously billed and collected Accounts Receivable of the RMS
Division Business still unearned; and (3) unearned customer deposits of the RMS
Division Business. Except
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as set forth on Schedule 4.01(i)(1), to Seller's Knowledge, there is no reason
why the Accounts Receivable of the RMS Division Business would not be
collectible in accordance with past business practices.
(l) Tangible Property. Except as otherwise set forth on Schedule
4.01(l), Seller has good title to all Tangible Property used in or for the RMS
Division Business and all of which are included within the Specified Assets,
free and clear of any Encumbrances. All of the Specified Assets are located at
0000 Xxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxx (the "Spalding Drive Facility") and at
0000 Xxxx Xxxxx Xxxxxx Xxxx, Xxxxxxxx, Xxxxxxx (the "East Xxxxx Bridge Road
Facility"). All Tangible Property used by Selling Companies or their customers
in the RMS Division Business is in good condition, ordinary wear and tear
excepted.
(m) Real Property. No Selling Company owns any Real Property used
in or for the RMS Division Business. Schedule 4.01(m) is a detailed list of all
Real Property leased by Seller or otherwise used in or for the RMS Division
Business, including, without limitation, Seller's Spalding Drive Facility,
showing location, rental cost, and landlord.
(n) Software and Intangibles. Schedule 4.01(n) is a complete list
and description of all Software and Intangibles owned, marketed, licensed, used
or under development by the Selling Companies and used in or for the RMS
Division Business, and, in the case of Software, a product description, the
language in which it is written, the type of hardware platform(s) on which it
runs, and any royalties or license fees required to be paid to a third party
for use of such Software. Except as set forth on Schedule 4.01(n), Seller has
good title to, and has the full right to use and transfer to Buyer, all of the
Software and Intangibles listed on Schedule 4.01(n), free and clear of any
Encumbrance. No rights of any third party are necessary to market, license,
sell, modify, or update the Software, and/or to create derivative works for the
Software listed on Schedule 4.01(n). To Seller's Knowledge, none of the
Software or Intangibles listed on Schedule 4.01(n), or their respective past or
current uses, has violated or infringed upon, or is violating, infringing upon,
any Software, patent, copyright, trade secret or other Intangible of any
Person. To Seller's Knowledge, except as otherwise listed on Schedule 4.01(n),
no Person is violating or infringing upon, or has violated or infringed upon at
any time, or has access to any source code to, any of the Software or
Intangibles listed on Schedule 4.01(n). To Seller's Knowledge, Schedule 4.01(n)
sets forth the procedures followed and testing conducted in making the Software
Millennium compliant, and Seller believes in good faith that the Software is
Millennium compliant, but Seller does not warrant that the Software is
Millennium compliant. "Millennium compliant" means that the Software will
continue to operate at the same levels of functionality and performance
following the date change to the year 2000, as before that date.
(o) Contracts. Schedule 4.01(o) is a complete list of all of the
following types of Contracts to which any Selling Company is a party or by
which any Selling Company is bound relating to the RMS Division Business
(collectively, the "Specified Contracts"), grouped into the following
categories and, where applicable, subdivided by product line: (1) all customer
Contracts; (2) Contracts for the purchase or lease of Real Property or
otherwise concerning Real Property owned or used by Seller including a
description of the Real Property; (3) loan agreements, mortgages, notes,
guarantees and other financing Contracts; (4) Contracts for the purchase, lease
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and/or maintenance of computer equipment and other equipment, Contracts for the
purchase, license, lease and/or maintenance of software under which any Selling
Company is the purchaser, licensee, lessee or user, and other supplier
Contracts (excluding computer maintenance and support contracts set forth in
Schedule 4.01(o)(4) which Seller agrees to use its reasonable best efforts to
assign to Buyer); (5) employment, consulting and sales representative Contracts
(excluding Contracts which constitute Employee Benefit Plans listed on Schedule
4.01(s), and excluding oral Contracts with employees for "at will" employment);
(6) Contracts under which any rights in and/or ownership of any Software
product of the RMS Division Business, any prior version thereof, or any part of
the customer base or business of the RMS Division Business was acquired; and
(7) other Contracts (excluding Contracts which constitute Insurance Policies
listed on Schedule 4.01(t), excluding this Agreement and all other Contracts
entered into among the parties hereto, or among the parties hereto and other
parties in connection herewith). Except for the Physical Plant Contracts and as
otherwise provided on Schedule 4.01(o), to Seller's knowledge, the Specified
Contracts are all the Contracts of the RMS Division Business. A description of
each oral Specified Contract is included on Schedule 4.01(o), and copies of
each written Specified Contract have been delivered to Buyer. Except as
provided on Schedule 4.01(o), to Seller's Knowledge, no customer has asserted
any claims that the Software described in their respective customer Contract is
defective or insufficient to provide the services required under such customer
Contract. Except as set forth on Schedule 4.01(o)(7), with respect to each of
the Specified Contracts and, to Seller's Knowledge, no Selling Company is in
default thereunder nor would be in default thereunder with the passage of time,
the giving of notice or both. Except as set forth on Schedule 4.01(o)(8), no
Selling Company has given or received any notice of default or notice of
termination or, to Seller's Knowledge, expects to receive any notice of default
or notice of termination thereunder with the passage of time, the giving of
notice or both with respect to any Specified Contract, and each Specified
Contract is in full force and effect in accordance with its terms. Schedule
4.01(o)(9) sets forth the analysis of work to be completed as of the date
indicated on such Schedule in connection with the Specified Contracts, and has
been prepared consistent with past business practices and represents Seller's
good faith belief of the contents thereof, but Seller does not warrant the
accuracy of such Schedule. Section 4.01(o)(9)(i) sets forth, by customer
contracts, the amount of deferred revenue (and unbilled accounts receivable
relating, respectively, to such contracts) relating to the RMS Division
Business reflected on the books and records of Seller as of June 30, 1997.
Schedule 4.01(o)(9)(ii) is a statement of Parent's Revenue Recognition Policy
which applies to the RMS Division Business. Schedule 4.01(o)(9)(i) has been
prepared applying the policy set forth in Schedule 4.01(o)(9)(ii) and is
consistent with it.
(p) Labor Matters. Schedule 2.02 is a list, as of April 30, 1997,
of all employees of Selling Companies engaged in the RMS Division Business and
(1) their titles or responsibilities; (2) their social security numbers and
principal residence address; (3) their dates of hire; (4) their current
salaries or wages; (5) their last compensation changes and the dates on which
such changes were made; (6) any specific bonus, commission or incentive plans
or agreements for or with them; and (7) any outstanding loans or advances made
to them. Except as limited by any employment Contracts listed on Schedule
4.01(o) and except for any limitations of general application which may be
imposed under applicable employment Laws, Seller has the right to terminate the
employment of each of the employees engaged in the RMS Division Business at
will. No Selling Company has ever been a party to or bound by any union or
collective bargaining Contract, nor is any such
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Contract currently in effect or being negotiated by or on behalf of any Selling
Company in connection with or relating to the RMS Division Business. No Selling
Company has experienced any labor problem that was or is material to the RMS
Division Business. Except as set forth on Schedule 2.02, no employee currently
engaged in the RMS Division Business has given written notice of an intention
to terminate his or her employment with any Selling Company. All employees
engaged in the RMS Division Business will be fully paid through the Closing
Date, including receipt of matching contributions to the 401(k) Plan.
(q) Taxes. Each Selling Company has timely filed all sales Tax
returns and reports required to be filed by it with respect to the RMS Division
Business and, except as set forth in Schedule 4.01(q), has timely paid all
sales Taxes or withholdings required to be paid by it with respect to such
returns and reports. Except as indicated on Schedule 4.01(q), no audit or other
Proceeding is pending or threatened against any Selling Company with respect to
the RMS Division Business, and no notice of deficiency or adjustment has been
received by any Selling Company with respect to the RMS Division Business, by
or from any governmental taxing authority, with respect to sales, use, excise,
real property, payroll, withholding or other Taxes, and there are no agreements
or waivers in effect which provide for an extension of time for the assessment
of any such Tax against any Selling Company.
(r) Compliance with Law; Permits. To Seller's Knowledge, the
operation of the RMS Division Business, the conduct of the RMS Division
Business as and where such business has been or presently is conducted, and the
ownership, possession and use of the Specified Assets used in or for the RMS
Division Business comply with all Laws applicable to the RMS Division Business
except where the failure to comply would not have, and could not be reasonably
be expected to have, a Material Adverse Effect. Except as set forth on Schedule
4.01(r), Seller has obtained and holds all Permits required for the lawful
operation of the RMS Division Business as and where such business is presently
conducted. All Permits relating to the RMS Division Business held by Seller are
listed on Schedule 4.01(r), and copies of such Permits have been delivered to
Buyer. Except as set forth on Schedule 4.01(r), no Selling Company has received
notice of any violation of Laws or any notice of any violation, suspension,
cancellation, or termination of any Permits.
(s) Employee Benefit Plans. Except as set forth on Schedule
4.01(s), no Selling Company sponsors, maintains or contributes to, or has any
ongoing Obligations with respect to, any Employee Benefit Plan, including, but
not limited to, any employee benefit plan as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), with
respect to employees of the RMS Division Business. Schedule 4.01(s) includes an
description of Selling Companies' Employee Benefit Plans covering employees of
the RMS Division Business that are currently in effect or as to which Selling
Companies have any ongoing Obligation, which description indicates,
generically, the employees covered or affected thereby and Seller's Obligations
thereunder. Copies of all Employee Benefit Plans described on Schedule 4.01(s)
and all written materials used by Selling Companies to describe their Employee
Benefit Plans to employees of the RMS Division Business have been delivered to
Buyer.
Except as set forth on Schedule 4.01(s), neither Seller nor
any ERISA Affiliate (as that terms is defined in the Internal Revenue Code of
1986, as amended, or under ERISA) has
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maintained, adopted or established, contributed to or been required to
contribute to, or otherwise participated in or been required to participate in,
any employee benefit plan or other program or arrangement subject to Title IV
of ERISA (including, without limitation, a "multi-employer plan" (as defined in
Section 3(37) of ERISA), a multiple employer plan (as defined in Section 210 of
ERISA) and a defined benefit plan (as defined in Section 3(35) of ERISA)).
(t) Insurance. All Insurance Policies relating to the RMS
Division Business held by Selling Companies are listed on Schedule 4.01(t), and
copies of such Insurance Policies have been delivered to LBSH. Except as
described on Schedule 4.01(t), there are no claims that are pending under any
of the Insurance Policies owned or maintained in connection with the RMS
Division Business, the outcome of which would have a Material Adverse Effect.
Except as set forth on Schedule 4.01(t), no insurance claims under any
insurance coverage or insurance coverage on behalf of the RMS Division Business
have been refused.
(u) Brokers. Except as set forth on Schedule 4.01(u), Seller has
not used any broker or finder in connection with the transactions contemplated
hereby, and Seller has not nor will have any liability or otherwise suffer or
incur any loss as a result of or in connection with any brokerage or finder's
fee or other commission of any person retained by Seller in connection with any
of the transactions contemplated by this Agreement.
(v) Accuracy of Statements. Neither this Agreement nor any
schedule, exhibit, statement, list, document, certificate or other information
furnished or to be furnished by or on behalf of Seller in connection with this
Agreement, when read together, or any of the transactions contemplated hereby
contains or will contain any untrue statement of a material fact or omits to
state a material fact necessary to make the statements contained herein or
therein, in light of the circumstances in which they are made, not misleading.
SECTION 4.02 Representations and Warranties of Servantis. Servantis
represents and warrants to LBSH and Buyer as follows:
(a) Organization and Qualification. Servantis is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has all requisite corporate power and authority to own or
lease and operate its properties and assets and to carry on its business as it
is now being conducted.
(b) Authority Relative to Agreement. Servantis has all requisite
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. The execution, delivery, and performance of
this Agreement by Servantis and the consummation by it of the transactions
contemplated hereby have been duly authorized by Servantis' Board of Directors
and no other corporate approvals or proceedings on the part of Servantis are
necessary to authorize this Agreement and the transactions contemplated hereby.
This Agreement has been duly executed and delivered by Servantis and
constitutes the legal, valid, and binding obligation of Servantis, enforceable
against Servantis in accordance with its terms, subject to the effect, if any,
of (1) applicable bankruptcy and other similar laws affecting the rights of
creditors generally, (2) rules of law governing specific performance,
injunctive relief, and other equitable remedies, and (3) the
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limitations imposed by public policy on the enforceability of provisions
requiring indemnification in connection with the offering, issuance, or sale of
securities.
(c) Brokers. Except as set forth on Schedule 4.02(c), Servantis
has not used any broker or finder in connection with the transactions
contemplated hereby, and Servantis has not nor will have any liability or
otherwise suffer or incur any loss as a result of or in connection with any
brokerage or finder's fee or other commission of any person retained by
Servantis in connection with any of the transactions contemplated by this
Agreement.
(d) Non-Contravention. The execution and delivery of this
Agreement by Servantis and the consummation by Servantis of the transactions
contemplated hereby will not (1) violate or conflict with any provision of the
Certificate of Incorporation or By-Laws of Servantis or (2) except as set forth
on Schedule 4.02(d) hereof, result in any violation of, conflict with, or
default (or an event which with notice or lapse of time or both would
constitute a default) or loss of a benefit under, or permit the termination of
or the acceleration of any obligation under, any material mortgage, indenture,
lease, agreement or other instrument applicable to the RMS Division Business,
or (3) result in the creation or imposition of any Encumbrances in favor of any
third person or entity upon any of the Specified Assets of the RMS Division
Business, other than any such violation, conflict, default, loss, termination
or acceleration that would not have a Material Adverse Effect.
(e) Consents. Except as set forth on Schedule 4.02(e), no
consent, approval, order or authorization of, or registration, declaration or
filing with, any Federal, state, local or foreign governmental or regulatory
authority is required to be made or obtained by Servantis in connection with
the execution and delivery of this Agreement by Servantis or the consummation
by Servantis of the transactions contemplated hereby, except for (1) compliance
by Servantis with the HSR Act, and (2) such consents, approvals, orders or
authorizations which is not obtained, or registrations, declarations or filings
which is not made, would not have a Material Adverse Effect or materially
adversely affect the ability of Servantis to consummate the transactions
contemplated hereby.
(f) Accuracy of Statements. Neither this Agreement nor any
schedule, exhibit, statement, list, document, certificate or other information
furnished or to be furnished by or on behalf of Servantis in connection with
this Agreement, when read together, or any of the transactions contemplated
hereby contains or will contain any untrue statement of a material fact or
omits to state a material fact necessary to make the statements contained
herein or therein, in light of the circumstances in which they are made, not
misleading.
SECTION 4.03 Representations and Warranties of Parent. Parent
represents and warrants to LBSH and Buyer as follows:
(a) Organization and Qualification. Parent is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to own or lease
and operate its properties and assets and to carry on its business as it is now
being conducted.
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(b) Authority Relative to Agreement. Parent has all requisite
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. The execution, delivery, and performance of
this Agreement by Parent and the consummation by it of the transactions
contemplated hereby have been duly authorized by Parent's Board of Directors
and no other corporate approvals or proceedings on the part of Parent are
necessary to authorize this Agreement and the transactions contemplated hereby.
This Agreement has been duly executed and delivered by Parent and constitutes
the legal, valid, and binding obligation of Parent, enforceable against Parent
in accordance with its terms, subject to the effect, if any, of (1) applicable
bankruptcy and other similar laws affecting the rights of creditors generally,
(2) rules of law governing specific performance, injunctive relief, and other
equitable remedies, and (3) the limitations imposed by public policy on the
enforceability of provisions requiring indemnification in connection with the
offering, issuance, or sale of securities.
(c) Brokers. Except as set forth on Schedule 4.03(c), Parent has
not used any broker or finder in connection with the transactions contemplated
hereby, and Parent has not nor will have any liability or otherwise suffer or
incur any loss as a result of or in connection with any brokerage or finder's
fee or other commission of any person retained by Parent in connection with any
of the transactions contemplated by this Agreement.
(d) Non-Contravention. The execution and delivery of this
Agreement by Parent and the consummation by Parent of the transactions
contemplated hereby will not (1) violate or conflict with any provision of the
Certificate of Incorporation or By-Laws of Parent or (2) except as set forth on
Schedule 4.03(d) hereof, result in any violation of, conflict with, or default
(or an event which with notice or lapse of time or both would constitute a
default) or loss of a benefit under, or permit the termination of or the
acceleration of any obligation under, any material mortgage, indenture, lease,
agreement or other instrument applicable to the RMS Division Business, or (3)
result in the creation or imposition of any Encumbrances in favor of any third
person or entity upon any of the Specified Assets of the RMS Division Business,
other than any such violation, conflict, default, loss, termination or
acceleration that would not have a Material Adverse Effect.
(e) Consents. Except as set forth on Schedule 4.03(e), no
consent, approval, order or authorization of, or registration, declaration or
filing with, any Federal, state, local or foreign governmental or regulatory
authority is required to be made or obtained by Parent in connection with the
execution and delivery of this Agreement by Parent or the consummation by
Parent of the transactions contemplated hereby, except for (1) compliance by
Parent with the HSR Act, and (2) such consents, approvals, orders or
authorizations which is not obtained, or registrations, declarations or filings
which is not made, would not have a Material Adverse Effect or materially
adversely affect the ability of Parent to consummate the transactions
contemplated hereby.
(f) Accuracy of Statements. Neither this Agreement nor any
schedule, exhibit, statement, list, document, certificate or other information
furnished or to be furnished by or on behalf of Parent in connection with this
Agreement, when read together, or any of the transactions contemplated hereby
contains or will contain any untrue statement of a material fact or omits to
state a material fact necessary to make the statements contained herein or
therein, in light of the circumstances in which they are made, not misleading.
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SECTION 4.04 Representations and Warranties of LBSH. LBSH represents
and warrants to the Selling Companies as follows:
(a) Organization and Qualification. LBSH is a corporation duly
organized and validly existing under the laws of England and has all requisite
corporate power and authority to own or lease and operate its properties and
assets and to carry on its business as it is now being conducted.
(b) Authority Relative to Agreement. Except as set forth on
Schedule 4.04(b), LBSH has all requisite corporate power and authority to
execute and deliver this Agreement and to perform its obligations hereunder.
The execution, delivery, and performance of this Agreement by LBSH and the
consummation by it of the transactions contemplated hereby have been duly
authorized by LBSH's Board of Directors and no other corporate approvals or
proceedings on the part of LBSH are necessary to authorize this Agreement and
the transactions contemplated hereby, other than the approval of this Agreement
by the shareholders of LBSH as required by the listing rules of the London
Stock Exchange. This Agreement has been duly executed and delivered by LBSH
and, subject to obtaining such shareholder approval, constitutes the legal,
valid, and binding obligation of LBSH, enforceable against LBSH in accordance
with its terms, subject to the effect, if any, of (1) applicable bankruptcy and
other similar laws affecting the rights of creditors generally, (2) rules of
law governing specific performance, injunctive relief, and other equitable
remedies, and (3) the limitations imposed by public policy on the
enforceability of provisions requiring indemnification in connection with the
offering, issuance, or sale of securities.
(c) Non-Contravention. The execution and delivery of this
Agreement by LBSH and the consummation by LBSH of the transactions contemplated
hereby will not (1) violate or conflict with any provision of the Memorandum
and Articles of Association of LBSH or (2) except as set forth on Schedule
4.04(c) hereof, result in any violation of, conflict with, or default (or an
event which with notice or lapse of time or both would constitute a default) or
loss of a benefit under, or permit the termination of or the acceleration of
any obligation under, any material mortgage, indenture, lease, agreement or
other instrument applicable to LBSH, or (3) result in the creation or
imposition of any Encumbrances in favor of any third person or entity upon any
of the Assets of LBSH, other than any such violation, conflict, default, loss,
termination or acceleration that would not have a material adverse effect on
its business or financial condition.
(d) Consents. Except as set forth on Schedule 4.04(d), no
consent, approval, order or authorization of, or registration, declaration or
filing with, any federal, state, local or foreign governmental or regulatory
authority is required to be made or obtained by LBSH in connection with the
execution and delivery of this Agreement by LBSH or the consummation by LBSH of
the transactions contemplated hereby, except for (l) compliance by LBSH with
the HSR Act, and (2) such consents, approvals, orders or authorizations which
if not obtained, or registrations, declarations or filings which if not made,
would not have a material adverse effect on its business or financial condition
or materially adversely affect the ability of LBSH to consummate the
transactions contemplated hereby.
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(e) Brokers. Except as set forth on Schedule 4.04(e), LBSH has
not used any broker or finder in connection with the transactions contemplated
hereby, and LBSH has not nor will have any liability or otherwise suffer or
incur any loss as a result of or in connection with any brokerage or finder's
fee or other commission of any person retained by LBSH in connection with any
of the transactions contemplated by this Agreement.
(f) Subsidiaries. Schedule 4.04(f) includes a complete and
accurate list of each subsidiary of LBSH, indicating the jurisdiction of
incorporation and the nature and level of ownership in such subsidiary by LBSH,
any subsidiary of LBSH, and any other person. Except as set forth on Schedule
4.04(f) hereto, neither LBSH nor any of its subsidiaries owns of record or
beneficially, directly or indirectly, (i) any shares of outstanding capital
stock or securities convertible into capital stock of any other corporation or
(ii) any participating interest in any partnership, joint venture, or other
noncorporate business enterprise. Each subsidiary of LBSH is a corporation duly
organized, validly existing and where required in good standing under the laws
of its jurisdiction of incorporation and has all requisite corporate power and
authority to own or lease and operate its properties and assets and to carry on
its business as it is now being conducted. Each subsidiary of LBSH is duly
qualified as a foreign corporation to do business, and where required is in
good standing, in each jurisdiction in which the character of its properties
owned or leased or the nature of its activities makes such qualification
necessary. All the issued capital stock or shares of LBSH's subsidiaries are
duly authorized, validly issued, fully paid and where possible nonassessable
and, except as set forth on Schedule 4.04(f), are owned by LBSH or by a wholly
owned subsidiary of LBSH free and clear of any Encumbrances, and, except as set
forth in the Circular, there are no proxies or voting or transfer agreements or
understandings outstanding with respect to any such shares.
(g) Capitalization. The authorized and issued shares of LBSH, as
of the Effective Date, are set forth on Schedule 4.04(g), all of the issued
shares are duly authorized and validly issued and are fully paid. LBSH does not
have any other class of shares. Except as set forth on Schedule 4.04(g), no
subscription, warrant, option, convertible security, stock appreciation or
other right (contingent or other) to purchase or acquire any shares of any
class of shares of LBSH is authorized or outstanding and there is not any
commitment of LBSH to issue any shares, warrants, options or other such rights
or to distribute to holders of any class of its shares any evidences of
indebtedness or assets. LBSH does not have any obligation (contingent or other)
to purchase, redeem or otherwise acquire any of its shares or any interest
therein or, except as set forth in the Circular, to pay any dividend or make
any other distribution in respect thereof.
(h) Securities Filings. LBSH has filed all forms, reports and
documents required to be filed with the London Stock Exchange since the
admission of its ordinary share capital to the Official List of the London
Stock Exchange, and, prior to Closing, LBSH has made available to Seller, as
filed with the Registrar of Companies, complete and accurate copies of (i) the
Annual Report of LBSH for the years ended December 31, 1996 and 1995, and (ii)
all other reports, statements and offering circulars (including the Circular as
that term is defined below) filed by LBSH with the London Stock Exchange since
December 31, 1996, in each case including all amendments and supplements
(collectively, the LBSH Securities Filings"). The LBSH Securities Filings
(including, without limitation, any financial statements or schedules included
therein) (i)
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were, to the extent required, prepared in compliance with the requirements of
the rules and regulations of the London Stock Exchange, and (ii) did not at the
time of filing (or if amended, supplemented or superseded by a filing prior to
the date hereof, on the date of that filing) contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(i) LBSH Shares. When admitted to the Official List of the London
Stock Exchange, the LBSH Shares issued pursuant to Section 3.03 above will
(subject only to any restriction arising under U.S. securities laws) be freely
tradable by Seller on the London Stock Exchange without any further
registration, requirements, opinions of counsel, or holding periods.
(j) Disclosure. Since December 31, 1996, there has been no
material adverse in the financial or trading position of LBSH.
(k) Pending Transactions. Except for this Agreement and the
transactions contemplated hereby and except as otherwise set forth on Schedule
4.04(k), LBSH is not a party to or bound by any agreement, negotiation,
discussion, commitment or undertaking with respect to a future merger or
consolidation with, or an acquisition of all or substantially all of the
property and assets of, any other corporation or person or the sale, lease or
exchange of all or substantially all of its properties and assets to any other
person which transaction would be sufficiently material to require the approval
of LBSH's shareholders under the rules of the London Stock Exchange.
(l) Financial Statements. LBSH's fiscal year ends on December 31.
Schedule 4.04(l) includes copies of the following audited financial statements
(the "Audited Financial Statements") prepared by Deloitte & Touche, Chartered
Accountants: (i) consolidated balance sheet of LBSH as of December 31, 1996,
1995, and 1994; and (ii) consolidated statements of operations and consolidated
statements of cash flows of LBSH and its business for the fiscal years ended
December 31, 1996, 1995, and 1994. Such balance sheets fairly present in all
material respects the financial position of LBSH as of their respective dates,
and such statements of operations and statements of cash flows present in all
material respects the results of operations of LBSH for the respective periods
then ended. LBSH is not aware of any information which is not reflected in the
Audited Financial Statements which would have a material adverse effect on its
business or financial condition.
(m) Actions Pending. Except as described on Schedule 4.04(m), (1)
no Proceeding involving or related to LBSH's business or any asset or liability
is currently pending or, to the best of LBSH's knowledge, threatened in
writing, nor has any Proceeding occurred at any time since January 1, 1997, to
which LBSH is or was a party, or by which its business or any asset or
liability is or was affected; (2) no Judgment involving or related to its
business or any asset or liability is currently outstanding, nor has any
Judgment been outstanding at any time since January 1, 1997, by which its
business or any asset or liability is or was affected; and (3) no breach of
contract, breach of warranty, tort, negligence, infringement, product
liability, discrimination, wrongful discharge or other claim of any nature
involving or related to its business has been asserted or, to the best of
LBSH's knowledge, threatened in writing by or against LBSH at any time since
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January 1, 1997, and, to the best of LBSH's knowledge, there is no basis for
any such claim. In each of the foregoing subsections (1), (2), and (3), a
Proceeding, Judgment, or breach shall mean a matter the occurrence of which
would have a material adverse effect on LBSH's business or financial condition.
As to each matter described on Schedule 4.04(m), copies of all pertinent
claims, pleadings, judgments, orders, correspondence and other legal documents
have been delivered to Seller.
(n) Compliance with Law; Permits. To the best of LBSH's
knowledge, the operation of its business, the conduct of its business as and
where such business has been or presently is conducted, and the ownership,
possession and use of the assets used in or for its business comply with all
Laws applicable to its business except where the failure to comply would not
have, and could not be reasonably be expected to have, a material adverse
effect.
(o) Accuracy of Statements. Neither this Agreement nor any
schedule, exhibit, statement, list, document, certificate or other information
furnished or to be furnished by or on behalf of LBSH in connection with this
Agreement, when read together, or any of the transactions contemplated hereby
contains or will contain any untrue statement of a material fact or omits to
state a material fact necessary to make the statements contained herein or
therein, in light of the circumstances in which they are made, not misleading.
SECTION 4.05 Representations and Warranties of Buyer. Buyer represents
and warrants to the Selling Companies as follows:
(a) Organization and Qualification. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to own or lease
and operate its properties and assets and to carry on its business as it is now
being conducted.
(b) Authority Relative to Agreement. Buyer has all requisite
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. The execution, delivery, and performance of
this Agreement by Buyer and the consummation by it of the transactions
contemplated hereby have been duly authorized by Buyer's Board of Directors and
no other corporate approvals or proceedings on the part of Buyer are necessary
to authorize this Agreement and the transactions contemplated hereby, other
than the approval of this Agreement by the sole shareholder of Buyer as
required by Delaware law. This Agreement has been duly executed and delivered
by Buyer and, subject to obtaining such shareholder approval, constitutes the
legal, valid, and binding obligation of Buyer, enforceable against Buyer in
accordance with its terms, subject to the effect, if any, of (1) applicable
bankruptcy and other similar laws affecting the rights of creditors generally,
(2) rules of law governing specific performance, injunctive relief, and other
equitable remedies, and (3) the limitations imposed by public policy on the
enforceability of provisions requiring indemnification in connection with the
offering, issuance, or sale of securities.
(c) Non-Contravention. The execution and delivery of this
Agreement by Buyer and the consummation by Buyer of the transactions
contemplated hereby will not (1) violate or conflict with any provision of the
Certificate of Incorporation or By-Laws of Buyer or (2) except as
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set forth on Schedule 4.05(c) hereof, result in any violation of, conflict
with, or default (or an event which with notice or lapse of time or both would
constitute a default) or loss of a benefit under, or permit the termination of
or the acceleration of any obligation under, any material mortgage, indenture,
lease, agreement or other instrument applicable to Buyer, or (3) result in the
creation or imposition of any Encumbrances in favor of any third person or
entity upon any of the Assets of Buyer, other than any such violation,
conflict, default, loss, termination or acceleration that would not have a
material adverse effect on its business or financial condition.
(d) Consents. Except as set forth on Schedule 4.05(d), no
consent, approval, order or authorization of, or registration, declaration or
filing with, any Federal, state, local or foreign governmental or regulatory
authority is required to be made or obtained by Buyer in connection with the
execution and delivery of this Agreement by Buyer or the consummation by Buyer
of the transactions contemplated hereby, except for (l) compliance by Buyer
with the HSR Act, and (2) such consents, approvals, orders or authorizations
which if not obtained, or registrations, declarations or filings which if not
made, would not have a material adverse effect on its business or financial
condition or materially adversely affect the ability of Buyer to consummate the
transactions contemplated hereby.
(e) Brokers. Except as set forth on Schedule 4.05(e), Buyer has
not used any broker or finder in connection with the transactions contemplated
hereby, and Buyer has not nor will have any liability or otherwise suffer or
incur any loss as a result of or in connection with any brokerage or finder's
fee or other commission of any person retained by Buyer in connection with any
of the transactions contemplated by this Agreement.
(f) Accuracy of Statements. Neither this Agreement nor any
schedule, exhibit, statement, list, document, certificate or other information
furnished or to be furnished by or on behalf of Buyer in connection with this
Agreement, when read together, or any of the transactions contemplated hereby
contains or will contain any untrue statement of a material fact or omits to
state a material fact necessary to make the statements contained herein or
therein, in light of the circumstances in which they are made, not misleading.
ARTICLE V
COVENANTS
SECTION 5.01 Conduct of the RMS Division Business. Between the
Effective Date of this Agreement and the Closing Date, except with the prior
written consent of Buyer:
(a) Seller shall (1) conduct the RMS Division Business in a
diligent manner consistent with past practices, (2) not make any change in its
business practices, and (3) use its best efforts to preserve the business
organization of the RMS Division Business intact, keeping available the
services of its current officers, employees, salesmen, agents and
representatives engaged in the RMS Division Business, and maintaining the good
will of its customers, suppliers and other Persons having business relations
with the RMS Division Business.
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(b) Seller shall not and shall procure that no other Selling
Company shall (1) create or assume any Encumbrance upon any of the RMS Division
Business, (2) incur any Obligation on behalf of or relating to the RMS Division
Business, (3) make any loan or advance to any Person on behalf of or relating
to the RMS Division Business, (4) assume, guarantee or otherwise become liable
for any Obligation of any Person on behalf of or relating to the RMS Division
Business, (5) commit for any capital expenditure on behalf of or relating to
the RMS Division Business, (6) purchase, lease, sell, abandon, or otherwise
acquire or dispose of any part of the RMS Division Business, (7) waive any
right or cancel any debt or claim on behalf of or relating to the RMS Division
Business, (8) assume or enter into any Contract on behalf of or relating to the
RMS Division Business other than this Agreement, any other Contract to be
entered into pursuant to the terms hereof, or any customer Contracts (provided,
however, that Seller may enter into customer Contracts without the consent of
Buyer so long as such customer Contracts are at minimum on Seller's standard
terms of contract and on terms consistent with past business practices at list
price less not more than fifteen percent (15%) and, provided, further, that
Seller notifies Buyer of the terms of all such customer Contracts), (9)
increase, or authorize an increase in, the compensation or benefits paid or
provided to any of its directors, officers, employees, salesmen, agents or
representatives engaged in the RMS Division Business, or (10) do anything else
outside the ordinary course of its business consistent with its past practices
on behalf of or relating to the RMS Division Business, whether or not
specifically described in any of the foregoing clauses.
(c) Seller shall not and shall procure that no other Selling
Company shall (1) permit or cause a breach or default by it or any Selling
Company under any of its Contracts constituting a Specified Contract of the RMS
Division Business, (2) adopt, sponsor or enter into any new Employee Benefit
Plan for any employees engaged in the RMS Division Business, (3) acquire the
business or any bulk assets of any other Person engaged in a business similar
to the RMS Division Business, or (4) terminate any part of the RMS Division
Business.
(d) Seller shall and shall procure that no other Selling Company
shall (1) maintain all Real Property and Tangible Property owned or used by
each Selling Company in the RMS Division Business in good condition and repair,
(2) maintain its Insurance Policies and Permits in connection with or relating
to the RMS Division Business in full force and effect, and (3) comply with all
applicable Contracts, Permits and Laws relating to or for the benefit of the
RMS Division Business.
(e) Seller and each Selling Company shall maintain its corporate
existence and good standing in its jurisdiction of incorporation. Seller shall
not amend its charter or bylaws in a manner which affects the RMS Division
Business or the respective Obligations of the parties hereunder.
SECTION 5.02 Issue of LBSH Stock.
(a) (1) As promptly as reasonably practicable after the date
hereof LBSH shall prepare a circular to shareholders constituting a prospectus
in accordance with the Listing Rules made under the Financial Services Xxx 0000
(the "Circular") with respect to the issue of convertible unsecured loan stock
of LBSH (the "LBSH Stock"), convertible into LBSH Shares to be issued to
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finance the Acquisition and, subject to its approval by London Stock Exchange
Limited (the "London Stock Exchange"), file the same with the Registrar of
Companies in England and Wales. LBSH shall as promptly as reasonably practical
after the date hereof apply for the Admission to the Official List of the
London Stock Exchange of the LBSH Stock. LBSH shall also take any action
required to be taken under other laws in connection with the effective issuance
of the LBSH Stock.
(2) As soon as reasonably practicable after the Effective
Date of this Agreement, LBSH shall take all action necessary, subject to an in
accordance with English laws and its Memorandum and Articles of Association, to
obtain the requisite approval of this Agreement and the Acquisition by the LBSH
shareholders at a duly called meeting and shall take such other actions as may
be required by applicable law and the applicable rules of the London Stock
Exchange to effect the approval of this Agreement and the Acquisition. The
Board of Directors of LBSH has determined that the Acquisition is advisable and
in the best interests of the shareholders of LBSH, and shall (so far as is
consistent with their fiduciary duties as directors of LBSH), recommend that
LBSH shareholders vote to approve the Agreement and the Acquisition and any
other matters to be submitted to LBSH shareholders in connection therewith.
(3) Seller shall cooperate with LBSH in the preparation of
the Circular and any amendments and supplements thereto and shall furnish LBSH
with all information about the RMS Division Business or as may otherwise be
required by the London Stock Exchange and shall take such other action as LBSH
may reasonably request in connection therewith.
(b) LBSH shall from time to time notify Seller of the status of
the Circular and of the proposed meeting of its shareholders.
(c) Subject to the requirements of Sections 8.03, 8.04, and 8.05,
LBSH agrees to defend, indemnify and hold the Selling Companies harmless from
and against, any and all suits, claims, demands, actions, causes of actions,
loss, damages, liabilities, cost and expense (including but not limited to
reasonable attorneys' fees and court costs and costs of other professionals)
arising in any manner out of the Circular.
SECTION 5.03 Access to Information.
(a) During the period from the Effective Date of this Agreement
to the Closing Date, Seller shall permit (1) Buyer, LBSH, and their authorized
representatives to have reasonable access to Seller's facilities during normal
business hours as coordinated with Seller's designated representative, and (2)
Buyer reasonable access to meet with customers of the RMS Division Business as
coordinated with Seller's designated representative in order to secure a smooth
transition of the customer relationship to Buyer; provided, however, that Buyer
shall have no right to terminate this Agreement pursuant to Section 7.01 below
or otherwise as a result of any due diligence review unless it discloses
matters existing at the Effective Date which would entitle Buyer or LBSH to
terminate pursuant to Section 7.01(g) below.
(b) Each of the parties hereto shall, and shall cause its
respective officers, directors, employees, representatives, advisors and agents
to, afford the officers, employees,
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representatives, advisors and agents of the other party with access to such
information concerning Seller or Buyer as may be necessary for each party to
ascertain the accuracy and completeness of the information supplied by such
parties for inclusion in any pre-merger notification report filed under the HSR
Act (and any additional information or documentary material supplied in
response to any request pursuant to Section 7A(e) of the HSR Act and the
regulations thereunder).
(c) If this Agreement is terminated, each of the parties hereto
shall, and shall cause its officers, employees, representatives, advisors and
agents to, destroy or return to the other party all confidential documents,
work papers and other materials, and all copies thereof, obtained by it or on
its behalf from such other party as a result of this Agreement or in connection
herewith, whether so obtained before or after the execution and delivery
hereof.
(d) Each of the parties hereto and its officers and employees
shall not disclose or use any information so obtained, except as required by
applicable law or legal process or by any applicable rules or regulations of a
national or foreign securities exchange or the NASD upon the advice of counsel,
without the prior written consent of the other party; provided that any such
information may be disclosed to a party's financial advisors, accountants,
counsel and other representatives, as may be appropriate or required in
connection with the transactions contemplated hereby, but only if such persons
shall be specifically informed by such party of the confidential nature of such
information and agree to comply with the restrictions contained herein. The
agreements contained in this Section 5.03(d) do not apply to information that
(1) is or becomes generally available to the public other than as a result of a
disclosure by a receiving party or its representatives, (2) can be demonstrated
to have been known to the receiving party on a non-confidential basis prior to
its receipt, (3) becomes available to a party on a non-confidential basis from
a source not bound by any duty of confidentiality to the other party, or (4) is
independently developed by a receiving party without reference to any
confidential information.
If any party or any of its respective representatives
becomes required by law (by deposition, interrogatory, request for documents,
subpoena, civil investigative demand, or similar process) or otherwise become
required to disclose any confidential information or material the recipient
party will provide the disclosing party with prompt prior written notice of
such requirement so that the disclosing party may seek a protective order or
other remedy, or waive compliance with the terms of this Agreement. If such
protective order or other remedy is not obtained, or if the disclosing party is
required to waive compliance with the provisions hereof, the recipient party
will furnish only that portion of the confidential information or material
which it is advised by written opinion of counsel is legally required and
exercise all reasonable efforts to obtain assurance that confidential
treatment, if available, will be accorded such confidential information or
material.
(e) No investigation pursuant to this Section 5.03 shall affect,
add to, or subtract from any representations or warranties of the parties
hereto or the conditions to the obligations of the parties hereto to effect the
Acquisition.
(f) During the period from the Effective Date of this Agreement
to the Closing Date, LBSH shall permit the Selling Companies and their
authorized representatives to consult with
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LBSH's underwriters regarding the status of the offer and sale of the LBSH
Stock to fund the Acquisition.
SECTION 5.04 Further Assurances. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use its best efforts to
take, or cause to be taken, all action and to do, or cause to be done, all
things necessary, proper or advisable to consummate and make effective as
promptly as practicable the Acquisition and all other transactions contemplated
by this Agreement, including, without limitation, using all reasonable efforts
to obtain all necessary waivers, consents and approvals and to effect all
necessary registrations and filings and to cause the conditions to Closing set
forth in Article VI hereof to be promptly fulfilled; provided, that the
foregoing shall not require any of the parties to agree to make, or to require
or permit any of the parties hereto to make, any divestiture of a significant
asset in order to obtain any waiver, consent or approval. Following the
Closing, the Selling Companies and Buyer and LBSH agree that each will hold any
and all sums received by it which is otherwise payable to the other party in
trust for such other party and shall promptly transfer to such other party (not
later than ten (10) business days after the after the last day of the month in
which such sums are received) and account to it for such sums.
SECTION 5.05 Acquisition Proposals. Between the Effective Date of this
Agreement and the Closing Date, subject to the fiduciary obligations of the
Board of Directors of the Selling Companies under applicable law as advised by
counsel, none of the Selling Companies nor any of their respective officers,
employees, representatives or agents, or their respective affiliates, shall,
directly or indirectly, solicit, initiate, encourage or respond to any
inquiries or proposals from, or participate in any discussions or negotiations
with, or provide any non-public information to, any Person or group (other than
LBSH and Buyer and their respective officers, employees, representatives and
agents) concerning any sale of the RMS Division Business. Each of the Selling
Companies shall immediately advise Buyer of, and communicate to Buyer the terms
of, any such inquiry or proposal received by any of the Selling Companies in
connection with the RMS Division Business.
SECTION 5.06 Notification of Certain Matters. Between the Effective
Date of this Agreement and the Closing Date, each of the parties hereto shall
promptly advise the other parties, in writing, of (a) the occurrence, or
failure to occur, of any event that such party believes would cause any of its
representations or warranties contained in this Agreement to be untrue or
inaccurate in any material respect at any time from the Effective Date hereof
to the Closing Date, and (b) any failure of such party or any officer,
director, employee or agent thereof, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder;
provided, however, that failure to give such notice shall not constitute a
waiver of any defense that may be validly asserted.
SECTION 5.07 Indemnity. Subject to the requirements of Sections 8.03,
8.04, and 8.05, Buyer agrees to defend, indemnify and hold the Selling
Companies harmless from and against, any and all suits, claims, demands,
actions, causes of action, loss, damages, liabilities, cost and expense
(including but not limited to reasonable attorneys' fees and court costs and
costs of other professionals) arising in any manner out of any failure of Buyer
after the Closing Date, to comply
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with or perform any Specified Liability, except to the extent that such suits,
claims, demands, actions, causes of action, loss, damages, liabilities, cost or
expense is a result of any matter which is the subject of a Selling Companies'
material misrepresentation, misstatement or omission of a material fact in
connection with the Specified Liability; provided, further, such
indemnification is without prejudice that Buyer may have for a cause of action
pursuant to Section 5.01 above.
SECTION 5.08 Shareholder Agreement. Xxxxxx Xxxxxxxx shall,
concurrently with the execution of this Agreement by LBSH and Buyer, have
executed and delivered to the Selling Companies a Shareholder Agreement, a copy
of which is attached hereto as Exhibit A and incorporated herein by reference.
SECTION 5.09 Best Efforts. Each of parties hereto shall use its best
efforts to consummate the transactions contemplated by this Agreement as of the
earliest practicable date. None of the parties hereto shall take, or cause to
be taken, or to the best of its ability permit to be taken, any action that
would impair the prospect of completing the transactions contemplated by this
Agreement.
SECTION 5.10 Comfort Letter. At the time of execution of this
Agreement, LBSH and Buyer shall have delivered to the Selling Companies an
executed comfort letter from LBSH's investment bankers, a copy of which is
attached hereto as Exhibit B and incorporated herein by reference.
ARTICLE VI
CONDITIONS TO THE ACQUISITION
SECTION 6.01 Conditions to Each Party's Obligation to Effect the
Acquisition. The respective obligations of each of the parties to effect the
Acquisition shall be subject to the fulfillment at or prior to the Closing Date
of the following conditions:
(a) This Agreement and the Acquisition shall have been approved
by the requisite vote of the shareholders of LBSH;
(b) The expiration or earlier termination of any waiting period
under the HSR Act shall have occurred;
(c) No preliminary or permanent injunction or other order, decree
or ruling issued by any court of competent jurisdiction nor any statute, rule,
regulation or order entered, promulgated or enacted by any governmental,
regulatory or administrative agency or authority shall be in effect that would
prevent the consummation of the Acquisition as contemplated hereby;
(d) LBSH shall have raised at least $33.45 million (or such
smaller amount as LBSH shall certify that it requires) through the offer and
sale of the LBSH Stock to fund the Acquisition; and
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(e) The execution and delivery by the parties hereto of a
Facilities and Services Agreement (the "Facilities and Services Agreement") in
the form agreed by the parties hereto prior to the Effective Date, providing
for among other things, (1) the lease to Buyer of space currently occupied by
the RMS Division Business at the Spalding Drive Facility for a period of up to
ninety (90) days following the Closing Date, and (2) the data processing
services at the Parent's Data Center located at the East Xxxxx Bridge Road
Facility for a period of up to nine (9) months following the Closing Date,
dated as of the Closing Date. The rent, fees and charges for the space and
services provided under the Facilities and Services Agreement shall be
determined by the parties based on Parent's actual cost to provide such space
and services without xxxx-up.
SECTION 6.02 Conditions to the Obligation of LBSH and Buyer to Effect
the Acquisition. The obligation of LBSH and Buyer to effect the Acquisition
shall be subject to the fulfillment at or prior to the Closing Date of the
following additional conditions:
(a) The Selling Companies shall have performed and complied in
all material respects with all their obligations, covenants, and agreements
required to be performed and complied with by them under this Agreement at or
prior to the Closing Date;
(b) The representations and warranties made by the Selling
Companies in Sections 4.01, 4.02, and 4.03 hereof (as qualified by the
schedules hereto), shall not, as of the Effective Date of this Agreement, have
been incorrect, untrue or false in any respect that failed to correctly state
facts in existence on the Effective Date of this Agreement that constituted a
Material Adverse Effect on the Effective Date of this Agreement;
(c) LBSH and Buyer shall have received a certificate from the
Chief Executive Officers of each of the Selling Companies, dated as of the
Closing Date, to the effect that the conditions set forth in Sections 6.02(a)
and (b) above have been satisfied;
(d) LBSH and Buyer shall have received the opinion of Porter,
Wright, Xxxxxx & Xxxxxx, counsel to the Selling Companies, with respect to the
matters set forth on Exhibit C and incorporated herein by reference, subject to
appropriate limitations and qualifications;
(e) LBSH and Buyer shall have received a certificate of the
Secretary of each of the Selling Companies as to the incumbency and signatures
of the officers of the such entities executing this Agreement;
(f) LBSH and Buyer shall have received copies of the resolutions
duly adopted by the respective boards of directors and, if applicable,
stockholders of each of the Selling Companies, authorizing each of the Selling
Companies to enter into and perform this Agreement, certified by proper
officers as in full force and effect on and as of the Closing Date;
(g) LBSH and Buyer shall have received good standing certificates
for each of the Selling Companies from its jurisdiction of incorporation, dated
no earlier than 15 days before the Closing Date;
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(h) LBSH and Buyer shall have received all other agreements,
certificates, instruments and documents reasonably requested by LBSH and Buyer
in order to fully consummate the transactions contemplated by this Agreement
and carry out the purposes and intent of this Agreement;
(i) There shall not have occurred in the period between the
Effective Date of this Agreement and the Closing Date a Material Adverse Change
(as that term is defined below) in the RMS Division Business. For purposes of
this Agreement, a "Material Adverse Change" means a material adverse change
other than a change arising or resulting, directly or indirectly, from industry
conditions or the public announcement of, or the response or reaction of
customers, vendors, licensors, investors, employees of the RMS Division
Business, or others to this Agreement, the Acquisition, or any of the
agreements or transactions contemplated by this Agreement or entered into in
connection with this Agreement or the Acquisition and such material adverse
change would have a Material Adverse Effect on the RMS Division Business; and
(j) Seller agrees and acknowledges as of the Effective Date of
this Agreement and will again agree and acknowledge as of the Closing Date as
follows:
(1) SELLER ACKNOWLEDGES THE LBSH SHARES HAVE NOT BEEN AND
WILL NOT BE REGISTERED, QUALIFIED, RECOMMENDED, APPROVED OR DISAPPROVED UNDER
FEDERAL SECURITIES LAW, NOR HAS THE U.S. SECURITIES AND EXCHANGE COMMISSION, OR
ANY OTHER FEDERAL OR STATE REGULATORY AUTHORITY, PASSED ON OR ENDORSED THE
MERITS OF THE OFFERING OF THE LBSH SHARES OR THE ACCURACY OR ADEQUACY OF ANY
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL. IN MAKING AN
INVESTMENT DECISION SELLER MUST RELY ON ITS OWN EXAMINATION OF LBSH AND THE
TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED.
(2) Seller agrees to cooperate and provide to Buyer and LBSH
information necessary for LBSH to comply with all applicable U.S. federal and
state securities laws, including the preparation and filing of Form D with the
U.S. Securities and Exchange Commission and the Georgia state securities
regulators.
(3) Set forth in this Agreement in the provision relating to
notices is the true and correct address of Seller's principal corporate office.
Seller has no present intention of becoming domiciled in any other state or
jurisdiction.
(4) Seller understands that the LBSH Shares have not been
nor will be registered under the Securities Act of 1933, as amended (the "1933
Act"), or under the securities or "blue sky" laws of any state or other
jurisdiction. Seller understands and agrees that the LBSH Shares must be held
indefinitely unless they are subsequently registered under the 1933 Act and,
where required, under the securities or "blue sky" laws of applicable states
and other jurisdictions, unless exemptions from registration are available.
Seller agrees that all certificates representing the LBSH Shares bear or will
bear legends setting forth the above resale limitations.
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(5) The LBSH Shares which may be issued to Seller are being
acquired for Seller's own account and not with a view to, or for resale in
connection with, any distribution thereof. Seller recognizes that no public
trading market for the LBSH Shares exists other than the London Stock Exchange.
(6) Seller qualifies as a "accredited investor," under Rule
501 promulgated under the 1933 Act because it is a corporation, not formed for
the specific purpose of acquiring the LBSH Shares, with total assets in excess
of $5,000,000. Seller has the financial ability to bear the economic risk of
the investment in LBSH for an indefinite period of time and has such knowledge
and experience in financial and business matters as to be capable of
evaluating, and has evaluated, the merits and risks of the proposed investment.
Seller understands that the representations and warranties of Seller contained
herein will be relied upon by LBSH and other persons in determining whether the
Supplemental Payments to be made in LBSH Shares are exempt from registration
under the 1933 Act and state securities laws.
(7) In connection with Seller's investment in LBSH, Seller,
to the extent Seller has deemed necessary, has obtained the advice of Seller's
own investment advisors, legal counsel and accountants ("Seller's Advisors").
(8) Seller or the Seller's Advisors, if any, have been
furnished with all written materials relating to LBSH that Seller or the
Seller's Advisors have requested of LBSH. Neither Seller nor any of the
Seller's Advisors has been furnished with any offering literature upon which
they have relied other than the information described in this subsection (8).
Seller acknowledges that any financial forecasts or projections included in the
materials delivered to Seller or the Seller's Advisors, pursuant to his
subsection (8) are not representations, warranties or covenants by LBSH, any
principal or employee of LBSH or any other person as to the financial condition
or results of operations that will be realized by LBSH.
(9) Seller and such Seller's Advisors have been afforded the
opportunity to ask questions or the management of LBSH concerning LBSH and any
other matters relating to the organization and operations of LBSH and the
management of LBSH has answered all such questions to the satisfaction of
Seller and such Seller's Advisors.
SECTION 6.03 Conditions to the Obligation of the Selling Companies to
Effect the Acquisition. The obligation of the Selling Companies to effect the
Acquisition shall be subject to the fulfillment at or prior to the Closing Date
of the following additional conditions:
(a) LBSH and Buyer shall have performed and complied in all
material respects with all its obligations, covenants, and agreements required
to be performed and complied with by them under this Agreement at or prior to
the Closing Date;
(b) The representations and warranties made by LBSH and Buyer in
Sections 4.04 and 4.05 hereof (as qualified by the schedules hereto), shall
not, as of the Effective Date of this Agreement, have been incorrect, untrue or
false in any respect that failed to correctly state facts in
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existence on the Effective Date of this Agreement that constituted a material
adverse effect on either of their businesses or financial conditions on the
Effective Date of this Agreement;
(c) The Selling Companies shall have received a certificate from
the Chief Executive Officer of each of LBSH and Buyer, dated as of the Closing
Date, to the effect that the conditions set forth in Sections 6.03(a) and (b)
above have been satisfied;
(d) The Selling Companies shall have received the opinion of
Parker, Poe, Xxxxx & Xxxxxxxxx, counsel to Buyer, with respect to the matters
set forth on Exhibit D and incorporated herein by reference, subject to
appropriate limitations and qualifications;
(e) The Selling Companies shall have received the opinion of
Xxxxxxx Xxxxx Xxxxxxxxxxx, counsel to LBSH, with respect to the matters set
forth on Exhibit E and incorporated herein by reference, subject to appropriate
limitations and qualifications;
(f) The Selling Companies shall have received a certificate of
the Secretary of each of LBSH and Buyer as to the incumbency and signatures of
the officers of each of LBSH and Buyer executing this Agreement;
(g) The Selling Companies have received copies of the resolutions
duly adopted by the board of directors of each of LBSH and Buyer and
shareholders of LBSH, authorizing each of LBSH and Buyer to enter into and
perform this Agreement, certified by proper officers as in full force and
effect on and as of the Closing Date;
(h) The Selling Companies shall have received a good standing
certificate for Buyer from its jurisdiction of incorporation, dated no earlier
than 15 days before the Closing Date;
(i) The Selling Companies shall have received from Buyer an
assumption of the Specified Liabilities, in form reasonably acceptable to the
parties hereto, dated as of the Closing Date, and duly executed by Buyer; and
(j) The Selling Companies shall have received all other
agreements, certificates, instruments and documents reasonably requested by the
Selling Companies in order to fully consummate the transactions contemplated by
this Agreement and carry out the purposes and intent of this Agreement.
ARTICLE VII
TERMINATION AND ABANDONMENT
SECTION 7.01 Termination and Abandonment. This Agreement may be
terminated and the Acquisition may be abandoned at any time prior to the
Closing Date, whether before or after approval by the shareholders of LBSH
and/or Buyer:
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(a) by mutual written consent approved by the Boards of Directors
of Parent, Servantis, Seller, LBSH, and Buyer;
(b) by LBSH and/or Buyer, if the conditions set forth in Sections
6.01(a), (c), (d), (e) or 6.02 shall not have been complied with, waived or
performed and such noncompliance or nonperformance shall not have been cured or
eliminated (or by its nature cannot be cured or eliminated), by Parent,
Servantis, and/or Seller on or before August 30, 1997; or
(c) by Parent, Servantis, and/or Seller, if the conditions set
forth in Sections 6.01(a), (c), (d), (e) or 6.03 shall not have been complied
with, waived or performed and such noncompliance or nonperformance shall not
have been cured or eliminated (or by its nature cannot be cured or eliminated),
by LBSH and/or Buyer on or before August 30, 1997; or
(d) by any of the Selling Companies, LBSH and/or Buyer, if the
condition set forth in Section 6.01(b) shall not have been complied with on or
before December 31, 1997; or
(e) by Parent, Servantis, and/or Seller, if LBSH's or Buyer's
Board of Directors fails to recommend approval of this Agreement or the
Acquisition to their respective shareholders or recommends against approval of
this Agreement or the Acquisition to their respective shareholders; or
(f) by Parent, Servantis, and/or Seller, if LBSH's or Buyer's
shareholders fail to approve this Agreement or the Acquisition; or
(g) by LBSH and/or Buyer, if the representations and warranties
made by Parent, Servantis, and/or Seller in Sections 4.01, 4.02, and 4.03
hereof (as qualified by the schedules hereto), shall, as of the Effective Date
of this Agreement, have been incorrect, untrue or false in any respect that
failed to correctly state facts in existence on the Effective Date of this
Agreement that constituted a Material Adverse Effect on the Effective Date of
this Agreement; or
(h) by Parent, Servantis, and/or Seller, if the representations
and warranties made by LBSH and/or Buyer in Sections 4.04 and 4.05 hereof (as
qualified by the schedules hereto), shall, as of the Effective Date of this
Agreement, have been incorrect, untrue or false in any respect that failed to
correctly state facts in existence on the Effective Date of this Agreement that
constituted a material adverse effect on either of their businesses or
financial conditions on the Effective Date of this Agreement.
SECTION 7.02 Effect of Termination. In the event of the termination of
this Agreement and the abandonment of the Acquisition pursuant to Section 7.01,
this Agreement shall thereafter become void and have no effect, and no party
hereto shall have any liability to any other party hereto or its stockholders
or directors or officers on account of such termination, and each party shall
be responsible for its own expenses, except as follows: (a) the obligations
imposed by Sections 5.03(c), 5.03(d), 7.03, and 7.04 hereof shall survive the
termination of this Agreement, and (b) subject to Sections 7.03(c) and 7.04(c)
below, nothing herein shall relieve any party from liability for any willful
breach hereof.
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SECTION 7.03 Termination Fee to Parent.
(a) Buyer will pay to Parent a termination fee of $2,500,000 (the
"Parent Termination Fee"), as liquidated damages, in the event this Agreement
is terminated pursuant to Section 7.01 by reason of a "Parent Triggering
Event."
(b) For purposes of this Section 7.03, each of the following
shall constitute a "Parent Triggering Event":
(i) a termination by the Selling Companies due to a willful
breach of this Agreement by LBSH and/or Buyer;
(ii) a termination by Parent, Buyer, or LBSH due to a
failure by LBSH's or Buyer's stockholders to approve the Acquisition at a
stockholders meeting in accordance with the terms of this Agreement by August
30, 1997;
(iii) a termination by Parent or LBSH due to a failure by
LBSH to fund the Acquisition in accordance with the terms of this Agreement by
August 30, 1997; or
(iv) a termination by Buyer and/or LBSH as a result of a
Material Adverse Change.
(c) The Parent Termination Fee shall be paid no later than five
(5) business days after a termination of this Agreement by reason of a Parent
Triggering Event described in Sections 7.03(b)(i)-(iii). The Parent Termination
Fee shall be paid at the time of notification of termination of this Agreement
by reason of a Parent Triggering Event described in Section 7.03(b)(iv). The
Parent Termination Fee shall be the exclusive remedy for compensatory damages
of the Selling Companies against LBSH, Buyer, LBSH's shareholders, and/or their
directors in the event of termination by reason of a Parent Triggering Event.
SECTION 7.04 Termination Fee to Buyer.
(a) Parent will pay to Buyer a termination fee of $2,500,000 (the
"Buyer Termination Fee") as liquidated damages, in the event this Agreement is
terminated pursuant to Section 7.01 by reason of a "Buyer Triggering Event."
(b) For purposes of this Section 7.04, the following shall
constitute a "Buyer Triggering Event":
(i) a termination by Buyer or LBSH due to a willful breach
of this Agreement by any of the Selling Companies.
(c) The Buyer Termination Fee shall be paid no later than five
(5) business days after a termination of this Agreement by reason of a Buyer
Triggering Event described in Section 7.04(b). The Buyer Termination Fee shall
be the exclusive remedy for compensatory damages of
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Buyer and LBSH against the Selling Companies, their shareholders, and/or their
directors in the event of termination by reason of a Buyer Triggering Event.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.01 Indemnification by Buyer and LBSH. Subject to the terms,
conditions, and limitations set forth herein, if the Acquisition is
consummated, Buyer and LBSH, jointly and severally, agree to indemnify Parent,
Servantis, and/or Seller against, and agree to hold Parent, Servantis, and/or
Seller harmless from, any and all actions, suits, losses, costs, claims,
damages and expenses (including reasonable attorneys' fees) (the "Losses"),
incurred or suffered by them relating to or arising out of or in connection
with any material breach of, or any material misrepresentation or inaccuracy
in, any representation or warranty made by Buyer and/or LBSH in Sections 4.04
and 4.05 of this Agreement (as qualified by the schedules hereto) where such
material breach or material misrepresentation or inaccuracy existed as of the
Effective Date of this Agreement; provided, however, that the amount of Losses
recoverable under the indemnity provisions of this Article VIII shall be
reduced, dollar-for-dollar, by the amount of any insurance proceeds paid to
Parent, Servantis, and/or Seller and by the amount of tax benefits realized by
Parent, Servantis, and/or Seller in respect of such Losses.
SECTION 8.02 Indemnification by the Selling Companies. Subject to the
terms, conditions, and limitations set forth herein, if the Acquisition is
consummated, the Selling Companies, jointly and severally, agree to indemnify
LBSH and/or Buyer against, and agree to hold LBSH and/or Buyer harmless from,
any and all Losses incurred or suffered by them relating to or arising out of
or in connection with any material breach of, or any material misrepresentation
or inaccuracy in, any representation or warranty made by the Selling Companies
in Sections 4.01, 4.02, and 4.03 of this Agreement (as qualified by the
schedules hereto) where such material breach or material misrepresentation or
inaccuracy existed as of the Effective Date of this Agreement; provided,
however, that the amount of Losses recoverable under the indemnity provisions
of this Article VIII shall be reduced, dollar-for-dollar, by the amount of any
insurance proceeds paid to LBSH and/or Buyer and by the amount of tax benefits
realized by LBSH and/or Buyer in respect of such Losses.
SECTION 8.03 Claims. The provisions of this Section 8.03 shall be
subject to Section 8.04. As soon as is reasonably practicable after becoming
aware of a claim for indemnification under this Agreement, the indemnified
party (the "Indemnified Party") shall promptly give written notice to the
indemnifying party (the "Indemnifying Party") of such claim and the amount the
Indemnified Party believes it will be entitled to receive hereunder in
indemnification from the Indemnifying Party under this Article VIII in respect
of such claim; provided, that the failure of the Indemnified Party to promptly
give such notice shall not relieve the Indemnifying Party of its obligations
except to the extent (if any) that the Indemnifying Party shall have been
prejudiced thereby. If the Indemnifying Party does not object in writing to
such indemnification claim within thirty (30) days of receiving written notice
thereof, the Indemnified Party shall be entitled to recover, on the sixtieth
(60th) day after such written notice was given, from the Indemnifying Party the
amount of such claim, and no later objection by the Indemnifying Party shall be
permitted; if the Indemnifying Party agrees that
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it has an indemnification obligation but objects that it is obligated to pay
only a lesser amount, the Indemnified Party shall nevertheless be entitled to
recover from the Indemnifying Party, on the sixtieth (60th) day after such
notice was given, the lesser amount, without prejudice to the Indemnified
Party's claim for the difference. In addition to the amounts recoverable by the
Indemnified Party from the Indemnifying Party pursuant to the foregoing
provisions, the Indemnified Party shall also be entitled to recover from the
Indemnifying Party interest on such amounts at the rate equal to the published
prime rate at The Chase Manhattan Bank, New York, New York, from, and
including, the sixtieth (60th) day after such notice of an indemnification
claim is given to, but not including, the date such recovery is actually made
by the Indemnified Party.
SECTION 8.04 Notice and Defense of Third Party Claims. The Indemnified
Party shall give written notice as promptly as is reasonably practicable to the
Indemnifying Party of the assertion of any claim, or the commencement of any
suit, action or proceeding, by any person or entity not a party hereto in
respect of which indemnity may be sought under Article VIII of this Agreement
("Third Party Claim"); provided that the failure of the Indemnified Party to
promptly give such notice shall not relieve the Indemnifying Party of its
obligations except to the extent (if any) that the Indemnifying Party shall
have been prejudiced thereby. If the Indemnified Party does not promptly elect
to defend or contest the Third Party Claim, then the Indemnifying Party, at its
sole option (a) shall be free to assume and control the prosecution or defense
of any such Third Party Claim in a reasonable manner, (b) may take all
reasonably necessary steps to contest the Third Party Claim or to prosecute
such Third Party Claim to conclusion or settlement satisfactory to the
Indemnifying Party, (c) shall notify the Indemnified Party of the progress of
any such Third Party Claim, (d) shall permit the Indemnified Party, at the sole
cost of such the Indemnified Party, to participate in such prosecution or
defense, and (e) shall provide the Indemnified Party with reasonable access to
all relevant information and documentation relating to the Third Party Claim
and the Indemnifying Party's prosecution or defense thereof. In any case, the
party not in control of the defense or prosecution of the Third Party Claim
shall cooperate with the other party in the conduct of the prosecution or
defense of such Third Party Claim. If, however, the Indemnified Party
reasonably determines in its judgment that representation by the Indemnifying
Party's counsel of both the Indemnifying Party and the Indemnified Party would
present such counsel with a conflict of interest, then the Indemnified Party
may employ separate counsel to represent or defend it in any such claim,
action, suit or proceeding and the Indemnifying Party shall pay the fees and
disbursements of such separate counsel. Whether or not the Indemnifying Party
chooses to defend or prosecute any such claim, suit, action or proceeding, all
of the parties hereto shall cooperate in the defense or prosecution thereof.
SECTION 8.05 Settlement or Compromise. None of the parties shall
compromise or settle any Third Party Claim without the prior written consent of
either LBSH and/or Buyer (if Parent, Servantis, and/or Seller controls and
defends such Third Party Claim) or Parent, Servantis, and/or Seller (if LBSH
and/or Buyer controls and defends such Third Party Claim), such consent not to
be unreasonably withheld. The person controlling the defense of such Third
Party Claim will give the other person at least twenty (20) days' notice of any
proposed settlement or compromise of any Third Party Claim for which it is
controlling the defense.
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SECTION 8.06 Limitations on Indemnification.
(a) Basket. Any indemnification pursuant to this Agreement shall
be subject to the requirement that no claim may be made until the aggregate
amount of Losses exceeds $250,000, after which time claims for indemnification
may be made for the aggregate amount of all Losses in excess of $150,000
subject to the terms, conditions and limitations set forth herein.
(b) Maximum Liability. The total and maximum aggregate lifetime
liability of the Selling Companies as a group and Buyer and LBSH as a group
under this Article VIII shall not exceed a dollar amount equal to one hundred
percent (100%) of the Purchase Price.
(c) Deadline for Indemnity Claims. The Indemnifying Party shall
have no liability with respect to any matter or claim for indemnification
hereunder, unless the Indemnified Party notifies the Indemnifying Party in
accordance with this Article VIII no later than the close of business on the
first (1st) anniversary of the Closing Date of a claim for indemnification
hereunder; provided, however, that such limitation shall not apply in any
matter involving intentional misrepresentation or fraud on the part of the
Indemnifying Party; provided, however, that (i) a claim of indemnification for
Loss suffered as a result of a material breach of the representation and
warranty under Section 4.01(q) shall survive until the expiration of the
applicable statute of limitations with respect to Taxes; and (ii) a claim of
indemnification for Loss in connection with a shareholder suit brought by
LBSH's shareholders in connection with the Circular to the extent that such
suit arises out of information supplied to LBSH by the Selling Companies which
is materially untrue or misleading or out of failure to state a material fact
shall survive until the close of business on the second (2nd) anniversary of
the Closing Date.
ARTICLE IX
NONCOMPETITION AGREEMENT; NONSOLICITATION AGREEMENT
SECTION 9.01 Noncompetition Agreement. Except as provided in Section
9.02 below, during the period beginning on the Closing Date and ending on the
first (1st) anniversary of the Closing Date, except with Buyer's prior written
consent, the Selling Companies shall not, directly or indirectly, own or
operate a business worldwide comprising the provision or licensing of a
Recovery Management System which automates the processes required to legally
recover debts that have been written off (a "Competing Business"). The business
of the RMS Division Business is conducted through the whole United States and
worldwide. Buyer intends to continue this following the Closing. The parties
believe that the foregoing covenant is reasonable in its duration and extent
and necessary to allow customers and immediate prospects of the RMS Division
Business to become attached to Buyer and therefore to prevent the impairment of
the goodwill of the RMS Division Business transferred hereby.
SECTION 9.02 Exception. The ownership by the Selling Companies or any
subsidiary or affiliate controlled by Parent, Servantis, and/or Seller of not
more than five percent (5%) in the aggregate of the outstanding securities of
any public company shall not, by itself, constitute a breach
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of the noncompetition agreement in Section 9.01, even if such public company
competes with Buyer or engages in a Competing Business.
SECTION 9.03 No Objection or Defense. The Selling Companies expressly
waive any objection to or defense regarding the scope, duration or geographic
area of the restriction on competition set forth in this Article IX.
SECTION 9.04 Enforcement of Noncompetition Agreement. The Selling
Companies expressly acknowledge that it would be extremely difficult to measure
the damage that might result from any breach of the noncompetition agreements
in this Article IX, and that any such breach will result in irreparable injury
to Buyer for which money damages could not adequately compensate. If a breach
of the noncompetition agreements in this Article IX occurs, then Buyer shall be
entitled, in addition to all other rights or remedies that it may have at law
or in equity to have an injunction issued by any competent court enjoining and
restraining Parent, Servantis, and/or Seller and all other persons involved
therein from continuing such breach. The existence of any claim or cause of
action that Parent, Servantis, and/or Seller or any such other person may have
against Buyer shall not constitute a defense or bar to the enforcement of any
of the noncompetition agreements under this Article IX.
SECTION 9.05 Early Termination of Noncompetition Agreement. In the
event that Parent, Servantis, and/or Seller is merged or consolidated with, or
a majority of Parent's, Servantis', and/or Seller's voting stock or all or
substantially all of Parent's, Servantis', and/or Seller's assets are acquired
by, a person, corporation or other party who, at the time of such merger,
consolidation, stock or asset acquisition, is engaged in a Competing Business,
then upon the consummation of such merger, consolidation, sale, acquisition or
similar business combination, all Parent's, Servantis', and/or Seller's
obligations, duties and covenants under this Article IX shall automatically
immediately terminate and expire.
SECTION 9.06 Effect on Acquiror. In the event that Parent, Servantis,
and/or Seller is merged or consolidated with, or a majority of Parent's,
Servantis', and/or Seller's voting stock or all or substantially all of
Parent's, Servantis', and/or Seller's assets are acquired by, a person,
corporation or other party (the "Acquiror"), and the provisions of Section 9.05
do not apply, then the Acquiror shall not be bound by or obligated under any of
Parent's, Servantis', and/or Seller's obligations or duties under this Article
IX.
SECTION 9.07 Nonsolicitation Agreement.
(a) During the period beginning on the Effective Date of this
Agreement and ending on the earlier of (i) the termination of this Agreement
pursuant to Section 7.01 above and (ii) twelve (12) months after the Closing
Date, none of the Selling Companies or their affiliates will actively solicit
any of the RMS Division Business employees employed by Buyer, LBSH, or their
affiliates or knowingly employ such persons.
(b) Except as permitted by Section 2.02 hereof, during the period
beginning on the Effective Date of this Agreement and ending on the earlier of
(i) the termination of this
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Agreement pursuant to Section 7.01 above and (ii) twelve (12) months after the
Closing Date, neither Buyer, LBSH, nor any of their affiliates will actively
solicit any employees of the any of the Selling Companies or their affiliates.
ARTICLE X
MISCELLANEOUS
SECTION 10.01 No Survival of Representations and Warranties. Except as
otherwise provided in this Agreement and Article VIII in particular, the
representations and warranties of Parent, Servantis, Seller, LBSH, and Buyer
contained herein shall not survive the Closing.
SECTION 10.02 Interpretation of Representations and Warranties. Each
representation and warranty made in this Agreement or pursuant hereto is
independent of all other representations and warranties made by the same
parties, whether or not covering related or similar matters, and must be
independently and separately satisfied. Exceptions or qualifications to any
such representation or warranty shall qualify, and shall be exceptions to, any
other representation or warranty.
SECTION 10.03 Expenses, Etc. Whether or not the transactions
contemplated by this Agreement are consummated, neither LBSH and Buyer, on the
one hand, and Parent, Servantis, and Seller, on the other hand, shall have any
obligation to pay any of the fees and expenses of the other incident to the
negotiation, preparation and execution of this Agreement, including the fees
and expenses of counsel, accountants, investment bankers and other experts.
LBSH and Buyer, on the one hand, and Parent, Servantis, and Seller, on the
other hand, shall indemnify the other and hold it harmless from and against any
claims for finders' fees or brokerage commissions in relation to or in
connection with such transactions as a result of any agreement or understanding
between such indemnifying party and any third party.
SECTION 10.04 Publicity; Confidentiality. LBSH, Buyer, Parent,
Servantis, and Seller agree that this Agreement and the exchange of information
pursuant thereto is confidential and they will not disclose or issue any press
release or make any other public announcement concerning this Agreement or the
transactions contemplated hereby without the prior consent of the other
parties, which will not be unreasonably withheld, except that LBSH, Buyer,
Parent, Servantis, or Seller may make such public disclosure that it believes
in good faith to be required by law or any applicable rules and regulations of
a national or foreign securities exchange or the NASD (in which event such
party shall consult with the others prior to making such disclosure). Subject
to the limitations of Article IX, following Closing, the Selling Companies
shall continue to retain in confidence and not use business and technical
information relating to the RMS Division Business sold to Buyer pursuant to
this Agreement.
SECTION 10.05 Execution in Counterparts. For the convenience of the
parties, this Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
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SECTION 10.06 Notices. All notices that are required or may be given
pursuant to the terms of this Agreement shall be in writing and shall be
sufficient in all respects if given in writing and delivered by hand or
national overnight courier service, or mailed by registered or certified mail,
postage prepaid, and shall be deemed given upon receipt, as follows:
If to Parent, Servantis, and/or Seller, to:
CHECKFREE CORPORATION
0000 Xxxx Xxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxx XXX 00000
Telecopy Number: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxxx
Chief Operating Officer
with copies to:
CHECKFREE CORPORATION
0000 Xxxx Xxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxx XXX 00000
Telecopy Number: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
General Counsel
and
PORTER, WRIGHT, XXXXXX & XXXXXX
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxx XXX 00000
Telecopy Number: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
If to Buyer or LBSH, to:
LBSS, INC.
0000 X. Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx XXX 00000
Telecopy Number: (000) 000-0000
Attention: Xxxxxx Xxxxxxxx
Chairman
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with copies to:
PARKER, POE, XXXXX & XXXXXXXXX LLP
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Telecopy Number: (000) 000-0000
Attention: Xxx Xxxxxx, Esq.
and
XXXXXXX XXXXX XXXXXXXXXXX
00 Xxxx Xxxx
Xxxxxx, Xxxxxx Xxxxxxx XX0X 0XX
Telecopy Number: 011-44-171-236-3728
Attention: Xxxxxxxx Xxxxxx, Esq.
or such other address or addresses as any party hereto shall have designated by
notice in writing to the other parties hereto.
SECTION 10.07 Waivers. LBSH and Buyer, on the one hand, and Parent,
Servantis, and Seller, on the other hand, may, by written notice to the other,
(a) extend the time for the performance of any of the obligations or other
actions of the other under this Agreement; (b) waive any inaccuracies in the
representations or warranties of the other contained in this Agreement or in
any document delivered pursuant to this Agreement; (c) waive compliance with
any of the conditions of the other contained in this Agreement; or (d) waive
performance of any of the obligations of the other under this Agreement. Except
as provided in the preceding sentence, no action taken pursuant to this
Agreement, including, without limitation, any investigation by or on behalf of
any party, shall be deemed to constitute a waiver by the party taking such
action of compliance with any representations, warranties, covenants or
agreements contained in this Agreement. The waiver by any party hereto of a
breach of any provision of this Agreement shall not operate or be construed as
a waiver of any subsequent breach.
SECTION 10.08 Amendments, Supplements, Etc. At any time, this
Agreement may be amended or supplemented by such additional agreements,
articles or certificates, as may be determined by the parties hereto to be
necessary, desirable or expedient to further the purposes of this Agreement, or
to clarify the intention of the parties hereto, or to add to or modify the
covenants, terms or conditions hereof or to effect or facilitate any
governmental approval or acceptance of this Agreement or to effect or
facilitate the filing or recording of this Agreement or the consummation of any
of the transactions contemplated hereby. Any such instrument must be in writing
and signed by all of the parties hereto.
SECTION 10.09 Entire Agreement. This Agreement and its schedules and
exhibits, and the documents to be executed or delivered at the Closing Date in
connection herewith, constitute the entire agreement among the parties hereto
with respect to the subject matter hereof and supersede all prior agreements
and understandings, oral and written, among the parties hereto with respect to
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the subject matter hereof. No representation, warranty, promise, inducement or
statement of intention has been made by any party that is not embodied in this
Agreement or such other documents, and none of the parties shall be bound by,
or be liable for, any alleged representation, warranty, promise, inducement or
statement of intention not embodied herein or therein.
SECTION 10.10 Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio, U.S.A. without
regard to conflict of laws principles.
SECTION 10.11 Jurisdiction. In any action between or among any of the
parties, whether arising out of this Agreement or otherwise, (a) the parties
shall bring such suit only in the federal and state courts located in the State
of Ohio and each of the parties irrevocably consents to the jurisdiction and
venue of the federal and state courts located in the State of Ohio; (b) if any
such action is commenced in a state court located in the State of Ohio, then,
subject to applicable law, no party shall object to the removal of such action
to any federal court located in the State of Ohio; (c) each of the parties
irrevocably waives the right to trial by jury; (d) each of the parties
irrevocably consents to service of process by first class certified mail,
return receipt requested, postage prepaid, with a copy to be sent by national
overnight courier service, to the address at which such party is to receive
notice in accordance with Section 10.06; and (e) the prevailing parties shall
be entitled to recover their reasonable attorney's fees and court costs from
the other parties. Subsections (a) and (b) above shall not apply to any action
with respect to a breach or claimed breach under Article IX above; provided,
however, the parties agree to bring such action in any appropriate jurisdiction
and venue in the United States.
SECTION 10.12 Binding Effect; Benefits. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and assigns. Except for the provisions of Section 7.03 and Article
VIII hereof, nothing in this Agreement, expressed or implied, is intended to
confer on any person other than the parties hereto or their respective
successors and assigns, any rights, remedies, obligations or liabilities under
or by reason of this Agreement.
SECTION 10.13 Assignability. Neither this Agreement nor any of the
parties' rights hereunder shall be assignable by any party hereto without the
prior written consent of the other parties hereto.
SECTION 10.14 Severability. Any term or provision of this Agreement
that is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction.
SECTION 10.15 Variation and Amendment. This Agreement may be varied or
amended at any time before or after the approval and adoption of this Agreement
by the shareholders of LBSH by action of the respective Boards of Directors of
LBSH, Buyer, Parent, Servantis, and Seller.
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the day and year first above written.
CHECKFREE CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxxx
----------------------------------------
Xxxxx X. Xxxxxxxxxx, Chief Operating Officer
SERVANTIS SYSTEMS HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxxxxxxx
----------------------------------------
Xxxxx X. Xxxxxxxxxx, Executive Vice President
SERVANTIS SYSTEMS, INC.
By: /s/ Xxxxx X. Xxxxxxxxxx
----------------------------------------
Xxxxx X. Xxxxxxxxxx, Executive Vice President
LONDON BRIDGE SOFTWARE HOLDINGS PLC
By: /s/ Xxxxxx Xxxxxxxx
----------------------------------------
Xxxxxx Xxxxxxxx, Chairman
LBSS, INC.
By: /s/ Xxxxxx Xxxxxxxx
----------------------------------------
Xxxxxx Xxxxxxxx, Chairman
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